contestada

Granite works maintains a debt-equity ratio of .65 and has a tax rate of 32 percent. the pretax cost of debt is 9.8 percent. there are 25,000 shares of stock outstanding with a beta of 1.2 and a market price of $19 a share. the current market risk premium is 8.5 percent and the current risk-free rate is 3.6 percent. this year, the firm paid an annual dividend of $1.10 a share and expects to increase that amount by 2 percent each year. using an average expected cost of equity, what is the weighted average cost of capital?

Respuesta :

Kalahira
E. 9.20 percent Re= 0.036 +1.2(0.085)= 0.138 Re= [($1.10+1.02)]$19 +.02= 0.0790526 ReAverage = (0.138 + 0.0790526)/2 = 0.108526 WACC= (1/1.65)(0.018526) + (0.65/1.65)(0.098)(1-0.32)= 9.20 percent

Otras preguntas