Question
XYZ Inc. has $25 million in excess cash, a market capitalization of $250 million and a market value of debt of $150 million. Its cost
XYZ Inc. has $25 million in excess cash, a market capitalization of $250 million and a market value of debt of $150 million. Its cost of equity is 12% and its cost of debt is 3%. The corporate tax rate is 25%. Calculate the WACC for XYZ Inc. Express your answer in percent and round to two decimals (do not include the %-symbol in your answer).
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The Handbook For Investment Committee Members
Authors: Russell L. Olson
1st Edition
0471719781, 978-0471719786
