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Milton company finances its operations with 40 percent debt and 60 percent equity. The annual yield on the companys debt is r_d=10% and the companys
Milton company finances its operations with 40 percent debt and 60 percent equity. The annual yield on the companys debt is r_d=10% and the companys tax rate is t=30%. The companys common stock trades at P_0=$55 per share, and its current dividend of D_0=$5 per share is expected to grow at a constant rate of g = 10% a year. What is the companys return on equity? What is the companys WACC?
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