My company has equity beta of 0.56, 5.02% cost of (risk-free) debt, and market risk premium is

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My company has equity beta of 0.56, 5.02% cost of (risk-free) debt, and market risk premium is 5% over the risk-free rate. D/(D+E) ratio is -31.7% and E/(D+E) ratio is 131.7%. Corporate tax rate is 40%. What is WACC for the company?

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Financial Reporting Financial Statement Analysis and Valuation a strategic perspective

ISBN: 978-1285190907

8th edition

Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

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Posted Date: Apr 02, 2024 03:57 AM

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My company has equity beta of 0.56, 5.02% cost of (risk-free) debt, and market risk premium is

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The standard WACC formula might not be suitable here because your company has a negative debttoequit... View the full answer

Financial Reporting Financial Statement Analysis and Valuation a strategic perspective

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