Question: Is this the correct answer? Assume Time Warner shares have a market capitalization of $60 billion. The company is expected to pay a dividend of

Is this the correct answer? Assume Time Warner shares have a market Is this the correct answer?

Assume Time Warner shares have a market capitalization of $60 billion. The company is expected to pay a dividend of $0.5 per share and each share trades for $20. The growth rate in dividends is expected to be 7% per year. Also, Time Warner has $20 billion of debt that trades with a yield to maturity of 8%. If the firm's tax rate is 25%, compute the WACC? A. 7.31% B. 8.17% C. 7.74% D. 8.6%

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