1. Business
  2. Finance
  3. company y has a cost of common equity of 14...

Question: company y has a cost of common equity of 14...

Question details

Company y has a cost of common equity of 14%. It also has a before-tax cost of debt of 10% and its marginal tax rate is 40%. Assume that the company's long-term debt sells at par value. The company has 500 shares of common stock outstanding that sell for $3.25 per share. What is their WACC if they use 66.67% stock and 33.33% debt?

Solution by an expert tutor
Blurred Solution
This question has been solved
Subscribe to see this solution