Question
Krogers market cap is $25 billion. Enterprise value is $35 billion. Krogers equity beta is 0.80. Cost of debt is 4%. Tax rate is 25%.
Krogers market cap is $25 billion. Enterprise value is $35 billion. Krogers equity beta is 0.80. Cost of debt is 4%. Tax rate is 25%. Risk-free rate is 3%, and the market risk premium is 8%. Kroger has $10 billion of excess cash.
(a) What is Krogers unlevered cost of capital?
(b) What is Krogers WACC?
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
9781285586618
