Question
Suppose JNJ has a market capitalization of $500 million and $150 million in outstanding debt. JNJs equity cost of capital is 9% and its debt
Suppose JNJ has a market capitalization of $500 million and $150 million in outstanding debt. JNJs equity cost of capital is 9% and its debt cost of capital is 5%. If the corporate tax rate is 30%, JNJs WACC is _____%.
Instruction: Type your answer in the unit of percentage point, and round to three decimal places. E.g., if your answer is -0.0106465 or -1.06465%, should type ONLY the number -1.065, neither -0.0106465, -0.0106, nor -1.065%, because I already have percentage sign at the end of the problem. Otherwise, Blackboard will treat it as a wrong answer.
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