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S Corp. is expected to pay a $2.55 dividend at year end, the dividend is expected to grow at a constant rate of 4.50% a
S Corp. is expected to pay a $2.55 dividend at year end, the dividend is expected to grow at a constant rate of 4.50% a year, and the common stock currently sells for $35 a share. The before-tax cost of debt is 5.50%, and the tax rate is 40%. The target capital structure consists of 30% debt and 70% common equity. What is the companys WACC? Do not round your intermediate calculations.
a.
6.96%
b.
9.05%
c.
9.24%
d.
7.97%
e.
8.39%
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