6. Timmy John's(TJs) is a premium sandwich chain store. It's shares (equity) have a market capitalization...

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6. Timmy John's(TJs) is a premium sandwich chain store. It's shares (equity) have a market capitalization of $20 billion. The company is expected to pay a dividend of $1 per share and each share trades for $20. The growth rate in dividends is expected to be 5% per year. Timmy John's has $5 billion of debt. The credit(default) spread for TJs is 2% and the risk-free rate is 2%. If the firm's tax rate is 20%, what is the WACC? [5 points] 6. Timmy John's(TJs) is a premium sandwich chain store. It's shares (equity) have a market capitalization of $20 billion. The company is expected to pay a dividend of $1 per share and each share trades for $20. The growth rate in dividends is expected to be 5% per year. Timmy John's has $5 billion of debt. The credit(default) spread for TJs is 2% and the risk-free rate is 2%. If the firm's tax rate is 20%, what is the WACC? [5 points]

Answer rating: 100% (QA)

To calculate the Weighted Average Cost of Capital WACC for Timmy Johns TJS we need to consider the c... View the full answer