Question
P15-15: Acme Storage has a market capitalization of $64 million, and debt outstanding of $49 million Acme plans to maintain this same debt-equity ratio in
P15-15: Acme Storage has a market capitalization of $64 million, and debt outstanding of $49 million Acme plans to maintain this same debt-equity ratio in the future. The firm pays an interest of 8.3% on its debt and has a corporate tax rate of 21%
a. Acme's free cash flow is expected to be $4.52 million next year and is expected to grow at a rate of 6% per year, what is Acme's WACC? (Round to the nearest integer)
b. What is the value of Acme's interest tax shield?
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Focus On Personal Finance
Authors: Jack Kapoor, Les Dlabay, Robert Hughes, Melissa Hart
6th Edition
125991965X, 978-1259919657
