Question
The following table displays information about the shares and bonds of Aber Plc, as well as the market. The percentage figures are expressed on an
The following table displays information about the shares and bonds of Aber Plc, as well as the market. The percentage figures are expressed on an annual basis.
Risk-free rate | 0.2% |
β | 0.8 |
Expected market return | 2.3% |
Credit risk premium | 1.5% |
Tax rate | 20% |
Calculate Aber Plc's weighted average cost of capital (WACC) assuming the company wants to raise finance, 40% of which will comprise debt. Show your workings and round figures to two decimal points.
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