Question: Question 21 0.813 points Save Answer The yield to matunty on Moudy's bond is 9 percent. Moudy Company's expected dividend at the end of the
Question 21 0.813 points Save Answer The yield to matunty on Moudy's bond is 9 percent. Moudy Company's expected dividend at the end of the year is $1.80 on its common stock and this dividend is expected to grow at a constant rate of 6% forever. The company is going to issue new common stock at a price of $40 per share with a $2 flotation cost. This company has a marginal tax rate of 30%. What is the weighted average cost of capital (WACC) of Moudy, if the capital structure is made up of 30 percent debt and 70 percent common equity? O a.5.0% Ob.5.2% c.5.8% O d.4.7% e.4,5%
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