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Calculation of WACC;Dragula Industries most recently paid a dividend of $1.70 and dividends are expected to grow at a 6% annual rate indefinitely. The stock currently sells for $39 per share and there
Calculation of WACC;
Dragula Industries most recently paid a dividend of $1.70 and dividends are expected to grow at a 6% annual rate indefinitely. The stock currently sells for $39 per share and there are 8 million shares outstanding. The company has 100,000 5% outstanding that are trading for par value and mature in 18 years. The coupon rate on the bonds is 5%. The average tax rate is 30%. What is the WACC?
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******** rate ** return/cost ** ****** **************************************************** ** *** *********** *********** *********** ** debt=5% ** it selling ** *** ********** ** ******************** millionweight ** debt=100/(100+312) * ************ of ****************** * *************** of debt*weight of *********** rate)+cost ** ************* ** *************************************************