Essex Corporation's target capital structure consists of 40% debt and 60% common equity. Assume that the firm
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Essex Corporation's target capital structure consists of 40% debt and 60% common equity. Assume that the firm has no retained earnings. The companys last dividend (D o) was $2.00, which is expected to grow at a constant rate of 5% and the current equilibrium stock price is $21.88. Essex can raise all the debt financing it needs at 14%. If Essex issues new common stock, a 20% flotation cost will be incurred. The firm tax rate is 40%. What is the WACC
Related Book For
Cornerstones of managerial accounting
ISBN: 978-1133943983
5th edition
Authors: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
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