Assume that the CAPM holds and you want to perform a discounted cash flow (DCF)...
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Assume that the CAPM holds and you want to perform a discounted cash flow (DCF) analysis to a company with the weighted average cost of capital (WACC) method. The beta factor () of the company's equity is 1.35, the market risk premium is at 4.00 %, and the risk-free interest rate is at 5.50%. The company's cost of debt is 4.00 %. Moreover, assume a debt ratio of 24.50% and a marginal tax rate of 25.00%.
What is the weighted average cost of capital (WACC) for the company?
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