Question
Bean's Coffee is trying to determine their weighted average cost of capital (WACC). They've gathered the following information about their capital structure: Capital Source Market
Bean's Coffee is trying to determine their weighted average cost of capital (WACC). They've gathered the following information about their capital structure:
| Capital Source | Market Value (in millions) | Book Value (in millions) | Required Return |
| Common Stock | 217 | 53 | 13% |
| Preferred Stock | 15 | 7 | 8% |
| Debt | 57 | 54 | 3% |
Bean's Coffee also has a corporate tax rate of 30%. What is the WACC for Bean's Coffee?
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Finance Operations
Authors: Charles Finley
1st Edition
1491292423, 978-1491292426
