Question
McCann Catching, Inc. has 2.00 million shares of stock outstanding. The stock currently sells for $12.70 per share. The firms debt is publicly traded and
McCann Catching, Inc. has 2.00 million shares of stock outstanding. The stock currently sells for $12.70 per share. The firms debt is publicly traded and was recently quoted at 90.00% of face value. It has a total face value of $15.00 million, and it is currently priced to yield 8.00%. The risk free rate is 4.00% and the market risk premium is 8.00%. Youve estimated that the firm has a beta of 1.49. The corporate tax rate is 40.00%.
The firm is considering a $42.92 million expansion of their production facility. The project has the same risk as the firm overall and will earn $10.00 million per year for 7.00 years.
What is the WACC for McCann Catching, Inc.?
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The Handbook Of Equity Derivatives
Authors: Jack Clark Francis, William W. Toy, J. Gregg Whittaker
1st Edition
0471326038, 978-0471326038
