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Carmax has a current price of $62. It also has 180 million shares outstanding and the market value of debt is $12,169 million. The companys
Carmax has a current price of $62. It also has 180 million shares outstanding and the market value of debt is $12,169 million. The companys equity beta is 1.53. Its tax rate is 38%. Assume that the risk free rate is 3% and the market return is 10%. The companys cost of debt is 2.2%. Compute the weighted average cost of capital (WACC) for Carmax.
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