Question
I am confused on how to use the following information to find the wacc Flower Incorporated shares are trading for thirty two dollars per share.
I am confused on how to use the following information to find the wacc
Flower Incorporated shares are trading for thirty two dollars per share. They have 1.13 billion shares outstanding. In addition, the market value of the firm's outstanding debt is $2 billion. There is a 10-year Treasury bond rate of 6.25%. Flower Incorporated has an outstanding credit record and has earned an AAA rating from the major credit rating agencies. The current interest rate on AAA corporate bonds is 6.45%. The historical risk premium for stocks over the risk-free rate of return is 5.5 percentage points. The firm's beta is estimated to be 1.1 and its statutory tax rate including federal, state, and local taxes, is 40%.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started