Charlotte's Crochet Shoppe has 10,400 shares common stock outstanding at a price per share of $62...

 

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Charlotte's Crochet Shoppe has 10,400 shares common stock outstanding at a price per share of $62 and a rate of return of 11.09 percent. The company also has 310 bonds outstanding, with a par value of $1,000 per bond. The pretax cost of debt is 5.87 percent and the bonds sell for 93.3 percent of par. What is the firm's WACC if the tax rate is 39 percent? Charlotte's Crochet Shoppe has 10,400 shares common stock outstanding at a price per share of $62 and a rate of return of 11.09 percent. The company also has 310 bonds outstanding, with a par value of $1,000 per bond. The pretax cost of debt is 5.87 percent and the bonds sell for 93.3 percent of par. What is the firm's WACC if the tax rate is 39 percent?

Answer rating: 100% (QA)

To calculate the weighted average cost of capital WACC we need to consider the cost of equity an... View the full answer