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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 60% debt and 40% common equity. What is the companys WACC? Do not round your intermediate calculations.
a. | 6.69% | |
b. | 9.24% | |
c. | 8.39% | |
d. | 6.25% | |
e. | 7.97% |
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