The “Dulces Margaritas” project has an initial investment cost of $40,000 and expected positive net cash flows of $3,200 per year from year 1 to year 10 (useful life), the tax rate is 30%. Consider all analysis in current pesos. Some additional information: In the market there is an interest rate free of irrigation CETES at 30 years: 5.4% The cost of debt for Dulces Margaritas is 13% before taxes. The average return of the market measured through the long-term IPC is 14%. The capital structure for the financing of “Dulces Margaritas” is 80% debt, 20% equity. The beta of the company is 0.8 What is the company's Weighted Average Cost of Capital (WACC)? (in percent, use a decimal)

Answer rating: 100% (QA)

Heres how to calculate the Weighted Average Cost of Capital WACC for Dulces Margaritas p... View the full answer