Company XYZ has 60 million shares of stocks traded at a current market price of $120. It
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Company XYZ has 60 million shares of stocks traded at a current market price of $120. It also has outstanding debt of $3 billion with a pre-tax cost of debt at 10%. You calculate that the Beta of this company is 1.5 and the book value of stock is $80 per share. Tax rate is 30%. What is the WACC of the company? (Assume market risk premium is 8% and risk-free rate is 2%).
Related Book For
Foundations of Finance The Logic and Practice of Financial Management
ISBN: 978-0132994873
8th edition
Authors: Arthur J. Keown, John D. Martin, J. William Petty
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