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9 Oct 2018
DEF Corp. has a target capital structure of 40% debt and 60% common stock. The company's outstanding annual coupon bonds have a yield to maturity of 8.5%. The company's common stock sells for $30 per share, D1 = $2.25 and g = .03. The company's tax rate is 37.5%. 1. What is the firm's cost of equity, 2. and what is the firm's WACC. Please show your work.
DEF Corp. has a target capital structure of 40% debt and 60% common stock. The company's outstanding annual coupon bonds have a yield to maturity of 8.5%. The company's common stock sells for $30 per share, D1 = $2.25 and g = .03. The company's tax rate is 37.5%. 1. What is the firm's cost of equity, 2. and what is the firm's WACC. Please show your work.
Nestor RutherfordLv2
10 Oct 2018
