The company Ventas y Distribucin S.A has the following information: Central Bank bonds yield 1.25% per

The company Ventas y Distribución S.A has the following information:

• Central Bank bonds yield 1.25% per year.

• The company has an Equity of 300 million, Corporate Bonds for 200 million at a rate of 8% per year and a Bank Credit of 100 million at a rate of 9% per year.

• The tax is 27%. • The leveraged beta is 0.98.

• The market risk premium is 11%.

What is the weighted average cost of capital for the firm?

Answer rating: 100% (QA)

To calculate the weighted average cost of capital WACC for the firm we need to consider the differen... View the full answer