Determine the zingales corp wacc

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Question - Zingales Corp. financial officer wants to estimate the cost of capital of her company. The company has a market value capital structure of 40% debt and 60% equity. She knows that on the stock market, the firm's common stock trades for $30 per share. The firm has just paid a dividend of $3.00 (i.e., D0 = $3.00) and future dividends are expected to grow at 3% per year, forever. On the other side, the firm's bonds currently trade in the market for $930. These bonds have a par value of $1,000, coupon rate of 6% paid semiannually, and 15 years remaining to maturity. The tax rate is 21%. Based on this information, determine the Zingales Corp. WACC?

Reference no: EM133052188

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