Calculate the weighted average cost of capital

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Reference no: EM132820480

Question - Calculate the following:

The cost of equity if the risk-free rate is 2%, the market risk premium is 8%, and the beta for the company is 1.3.

The cost of equity if the company paid a dividend of $2 last year and is expected to grow at a constant rate of 7%. The stock price is currently $40.

The weighted average cost of capital (WACC) if the company has a total value of $1 million with a market value of its debt at $600,000 and a market value of its equity at $400,000. Its cost of debt is 6% and its cost of equity is 15%. The tax rate it pays is 25%.

Reference no: EM132820480

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