Estimating components of both wacc and ddmanalysts estimate, Ask an Expert

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Estimating Components of both WACC and DDM

Analysts estimate the cost of debt capital for Abbott Laboratories (NYSE: ABT) is 2.34% and that its cost of equity capital is 4.1%. Assume that ABT's marginal tax rate is 36%, the risk-free rate is 5.5%, the market risk premium is 5.9%, the ABT market price is $47.73 per common share, and its dividends are $1.26 per common share.

(a) Compute ABT's average borrowing rate and its market beta. (Round your answers to one decimal place.)

Average borrowing rate =

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Financial Management, Finance

Category:- Financial Management
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