Question
B Corp. is expected to pay a $2.45 dividend at year-end, the dividend is expected to grow at a constant rate of 4,50% a year,
B Corp. is expected to pay a $2.45 dividend at year-end, the dividend is expected to grow at a constant rate of 4,50% a year, and the common stock currently sells for $35 a share. The before-tax cost of debt is 5.5% and the tax rate is 40%. The target capital structure consists of 40% debt and 60% common equity. What is the company's WACC? Do not round your intermediate calculations.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To calculate the Weighted Average Cost of Capital WACC we need to consider the cost of both debt and ...
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
10th Canadian edition
1259261018, 1259261015, 978-1259024979
