Calculate firms WACC using the CAPM. Determine the WACC for ABC Printing INC. given these assumptions:

Calculate a firm's WACC using the CAPM. Determine the WACC for ABC Printing Inc., given these assumptions: - Weights of 45% debt and 55% common equity (no preferred equity) - A 40% tax rate - Cost of debt is 7% - Beta of the company is 1.3 - Risk-free rate is 3% - Return on the market is 12% - The Formula for WACC: (E/VRe)+(D/VRd(1TC) Where: E= Market Value of the firm's equity D= Market value of the firm's debt V=E+D Re = Cost of Equity Rd = Cost of debt Tc= Corporate tax rate - The formula for CAPM: ERi = Rf + Bi (ERm - Rf) Where: ERi= Expected rate of return on investment Rf = risk free rate Bi= beta of the investment (ERmRf)= market risk premium Calculate a firm's WACC using the CAPM. Determine the WACC for ABC Printing Inc., given these assumptions: - Weights of 45% debt and 55% common equity (no preferred equity) - A 40% tax rate - Cost of debt is 7% - Beta of the company is 1.3 - Risk-free rate is 3% - Return on the market is 12% - The Formula for WACC: (E/VRe)+(D/VRd(1TC) Where: E= Market Value of the firm's equity D= Market value of the firm's debt V=E+D Re= Cost of Equity Rd= Cost of debt Tc= Corporate tax rate - The formula for CAPM: ERi =Rf+Bi(ERmR) Where: ERi= Expected rate of return on investment Rf= risk free rate Bi= beta of the investment (ERmRf)= market risk premium