Question
The following information is gleaned from the financial statement of Quackenbush Inc.: Beta of common stock = 1.4 Treasury bill rate = 4.50% Market risk
The following information is gleaned from the financial statement of Quackenbush Inc.:
Beta of common stock = 1.4
Treasury bill rate = 4.50%
Market risk premium = 8%
Yield to maturity on long-term debt = 7%
Book value of equity = $330 million
Market value of equity = $660 million
Long-term debt outstanding = $660 million
Corporate tax rate = 21%
What is the company’s WACC?
Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.
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Intermediate Financial Management
Authors: Eugene F Brigham, Phillip R Daves
14th Edition
0357516664, 978-0357516669
