A firm maintains a debt-to-equity ratio of 0.65 and has a tax rate of 41%. The company
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A firm maintains a debt-to-equity ratio of 0.65 and has a tax rate of 41%. The company does not issue preferred stock but has a pre-tax cost of debt of 10.00%. There are 20,000 shares of the company's stock outstanding with a beta of 0.9 and market price of $45.30. Yesterday, the company issued an annual dividend in the amount of $1.00 per share. Dividends are expected to grow at 5.94% indefinitely. What is the company's weighted average cost of capital?
6.89%
7.08%
7.26%
7.44%
7.62%
Related Book For
Using Financial Accounting Information The Alternative to Debits and Credits
ISBN: 978-1133161646
7th Edition
Authors: Gary A. Porter, Curtis L. Norton
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