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Using the information below, calculate the firm's WACC. Target capital structure is 30% debt and 70% equity Long-term government bonds yielding 3% Company pays 225
Using the information below, calculate the firm's WACC.
- Target capital structure is 30% debt and 70% equity
- Long-term government bonds yielding 3%
- Company pays 225 bp above comparable government bonds for its debt
- Tax Rate is 25%
- Market Risk Premium is 6.3%
- Beta is 1.17
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Step: 1
First lets calculate the cost of equity using the Capital Asset Pr...
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Intermediate Financial Management
Authors: Eugene F Brigham, Phillip R Daves
14th Edition
0357516664, 978-0357516669
