Question
Blackshear Corporation has a target capital structure of 30% debt and 70% common equity, with no preferred stock. Its before-tax cost of debt is 8.5%,
Blackshear Corporation has a target capital structure of 30% debt and 70% common equity, with no preferred stock. Its before-tax cost of debt is 8.5%, and its marginal tax rate is 25%. The current stock price is P0 = $24. The last dividend was $2.45 , and it is expected to grow at a 4% constant rate.
What is its cost of common equity and its WACC?
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The Engineers Cost Handbook Tools For Managing Project Costs
Authors: Richard E. Westney
1st Edition
0824797965, 978-0824797966
