A company issued debt in the past with a 4% coupon rate which has a...
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A company issued debt in the past with a 4% coupon rate which has a market value of $500 million today. Today, it borrowed $200 million worth of debt at par with a coupon rate of 6%. It has equity composed of 10 million shares each priced at $50 with beta of 1.25. The shares will pay a dividend of $4 in one year and theyll continue to grow forever at a constant rate. If the risk free rate is 2%, market risk premium is 6% and tax rate is 40%, what is the companys WACC?
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