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Test Review - Anthony SheltonYour test grade is 100%The professor has configured this test to allow students to:Show Questions Answered CorrectlyShow Questions Answered IncorrectlyShow All Responses Selected By StudentShow What The Correct Response Should BeQUESTION:1[QUESTION BANK ID:269617]TYPE:MULTIPLE CHOICECORRECTDobson Dairies has a capital structure which consists of 60 % long-term debt and 40 % common stock. The company’s CFO has obtained the followinginformationThe before-tax yield to maturity on the company’s bonds is 8 %The company’s common stock is expected to pay a $3.00 dividend at year end (D= $3.00), and the dividend is expected to grow at a constant rate of 7 %a year. The common stock currently sells for $60 a shareAssume the firm will be able to use retained earnings to fund the equity portion of its capital budgetThe company’s tax rate is 40 %What is the company’s weighted average cost of capital (WACC)?A12.00%B8.03%C9.34%D8.00%E7.68%