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Quinlan Enterprises stock trades for $57.00 per share. It is expected to pay a $1.65 dividend at year end and the dividend is expected to
Quinlan Enterprises stock trades for $57.00 per share. It is expected to pay a $1.65 dividend at year end and the dividend is expected to grow at a constant rate of 7.00% a year. The before-tax cost of debt is 7.00%, and the tax rate is 30%. The target capital structure consists of 50% debt and 55% common equity. What is the company's WACC if all the equity used is from reinvested earnings?
- 6.92%
- 7.14%
- 7.40%
- 7.57%
- 7.77%
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