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You have been assigned to calculate the Weighted-Average-Cost-of-Capital (WACC) for your small firm. The company has sources of long- term capital. Its marginal tax rate

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You have been assigned to calculate the Weighted-Average-Cost-of-Capital (WACC) for your small firm. The company has sources of long- term capital. Its marginal tax rate is 23% First, there are 2.354,000 shares of common stock outstanding, which are currently trading at $37.51 per share. Recently, your firm announced Earings per Share (EPS) of $3.24. You expect earnings to grow at 1.55% per year indefinitely Second, there is an issue of 42,500 coupon bonds outstanding. These bonds have a face value of $1,000, mature in seventeen years, and pay 5.74% annual coupons. These instruments are currently trading for $923.16. Based on the assumption, use the Gordon Growth Model to estimate a reasonable return on the firm's stock @ 10.19% 11.47% 8.68% 8.81% 10.32%

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