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WACC and cost of common equity

Kahn Inc. has a target capital structure of 60% common equity and 40% debt to fund its $10 billion in operating assets. Further-more, Kahn Inc. has a WACC of 13%, a before-tax cost of debt of 105, and a tax rate of 40%. The company's retained earnings are adequate to provide the common equity portion of its capital budget. Its expected dividend next year (D1) is $3 and the current stock price is $35.

What is the company's expected growth rate?

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Financial Accounting, Accounting

Category:- Financial Accounting
Reference No.:- M9164553

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