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Calculate the after-tax wacc

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Reference no: EM133114355

Question - You are given the following information on Countryside Clubs Ltd:

Book value

Market value

Debt

$25,000,000

$30,000,000

Equity

$50,200,000

$70,000,000

Total

$75,200,000

$100,000,000

Countryside currently has some bonds outstanding with a coupon rate of 10% paid annually, face value of $1,000 and maturity of 10 years. The bond was issued at par.

The company's share is traded at the beta of 2, market risk premium of 8% and risk-free rate of 4%.

Countryside's tax rate is 30%

Required - Calculate the after-tax WACC?

Reference no: EM133114355

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