Question: Please Help Kosmo, Inc. has a market value capital structure of 25% debt and 75% equity. The tax rate is 40%. The firm's bonds currently
Kosmo, Inc. has a market value capital structure of 25% debt and 75% equity. The tax rate is 40%. The firm's bonds currently trade in the market for $930. These bonds have a face value of $1,000, coupon rate of 8% paid semiannually, and 10 years remaining to maturity. The firm's common stock trades for $15 per share. The firm has just paid a dividend of $2.00 (i.e., DO=2.00 ). Future dividends are expected to grow at 3% per year. Based on this information, Ma, Inc.'s WACC is %. 1) 10.98 2) 12.17 3) 11.94 4) 13.26 5) 13.91
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