Question 7 (1 point)

Schadler Systems is expected to pay a $3.50 dividend at year-end (D1 = $3.50), the dividend is expected to grow at a constant rate of 6.50% a year, and the common stock currently sells for $62.50 a share. The before-tax cost of debt is 7.50%, and the tax rate is 40%. The target capital structure consists of 40% debt and 60% common equity. What is the companys WACC if all equity is from retained earnings?

Question 7 options:

	8.70%
	8.35%
	9.06%
	9.42%