Question: 1 3 . Calculating the WACC [ LO 3 ] In Problem 1 2 , suppose the most recent dividend was $ 3 . 2

13 .

Calculating the WACC

[

3]

In Problem

12,

suppose the most recent dividend was $

3.25

and the dividend growth rate is

5

percent. Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is

21

percent. What is the company's WACC?

13. Calculating the WACC [LO3] In Problem 12, suppose the most

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