collected the following data: The yield on the company’s outstanding
bonds is 75%, its tax rate is 35%, the next expected dividend is $0.625
a share, the dividend is expected to grow at a constant rate of 6.50% a
year, the price of the stock is $18.00 per share, the flotation cost
for selling new shares is 12%, and the target capital structure is 40%
debt and 60% common equity. What is the firm's WACC, assuming it must
issue new stock to finance its capital budget?
Please increase the deadline to at least 48 hours... View the full answer