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kindly help me out I have 20mins I will give you thumbs up A firm uses only debt and common equity. It can borrow unlimited
kindly help me out I have 20mins I will give you thumbs up
A firm uses only debt and common equity. It can borrow unlimited amounts at an interest rate of 10% as long as it finances at its target capital structure, which calls for 40% debt and 60% common equity. Its last dividend was $2.25, its expected constant growth rate is 5% and its common stock sells for $35. New shares can be sold at a flotation cost of 15%, and is in the 35% tax bracket. What is their WACC if all common equity is from newly issued shares? 10.36%5.83%9.65%7.36%Step by Step Solution
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