Question
common stock (book value: P65M) is estimated at P60M and the market value of its interest bearing debt (Book value: P35M) is estimated at P40M.
common stock (book value: P65M) is estimated at P60M and the market value of its interest bearing debt (Book value: P35M) is estimated at P40M. The average before tax yield on these liabilities is 15% per year. Income taxes are 40%. The company is expected to pay a dividend of P10 per share and the stock is selling at a price of P100 per share. The growth rate of dividend is projected to be 2.5% per year.
What is the weighted average cost of capital (WACC) of the company as a whole?
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Management Leading And Collaborating In The Competitive World
Authors: Thomas Bateman, Scott Snell
9th Edition
0078137241, 9780078137242
