Question
The Lee Co. has 1.4 million shares of stock outstanding. The stock is currently sells for $20 per share. The firms debt is publicly traded
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The Lee Co. has 1.4 million shares of stock outstanding. The stock is currently sells for $20 per share. The firms debt is publicly traded and was recently quoted at 93 percent of face value. It has a total face value of $5 million, and it is currently priced to yield 11%. The risk free-rate is 8%, and the market risk premium is 7%. Youve estimated that Lee has a beta of .74. If the corporate rate is 34%, what is the WACC of Lee Co.?
9.12%
10.24%
12.34%
15.12%
The Lee Co. has 1.4 million shares of stock outstanding. The stock is currently sells for $20 per share. The firms debt is publicly traded and was recently quoted at 93 percent of face value. It has a total face value of $5 million, and it is currently priced to yield 11%. The risk free-rate is 8%, and the market risk premium is 7%. Youve estimated that Lee has a beta of .74. If the corporate rate is 34%, what is the WACC of Lee Co.?
| 9.12% | ||
| 10.24% | ||
| 12.34% | ||
| 15.12% |
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Quantitative Analysis For Management
Authors: Barry Render, Ralph M. Stair, Michael E. Hanna, Trevor S. Hale
14th Edition
