You are trying to determine the WACC for a company.  It has the following characteristics. 

The company had pre-tax net income of $75mm last year and paid taxes of $25mm.

The company has $1,500mm of total liabilities, $100mm of accounts payable, and $650mm of long-term debt.

The company has 220mm shares authorized, 45mm shares issued, and 5mm shares of treasury stock.   The stock now trades at $32.50 per share.

the 10 year Treasury rate is 4%

The pre-tax cost of debt is 8%

The company's Beta is 1.5 and the market return for equities is 9%.

What is the WACC? 

Answer rating: 100% (QA)

SOLUTION To calculate the Weighted Average Cost of Capital WACC we need to calculate the cost of equ... View the full answer