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What is the ( WACC) weighted average cost of capital based on the following

debt-equity ratio= 0.65

tax rate=32%

25,000 shares outstanding With a beta = 1.2

Stock price is $19 a share.

Take the average from the security market line and the dividend discount model.

current market risk premium=8.5%

Treasury-bill rate =3.6%

annual dividend =$1.10 /share (It will increase by 2% each year)

Pre-tax cost of debt =9.8%

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92752087

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