Expected to grow at a constant rate

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Marie Corp. has $1500 in debt outstanding and $2800 in common stock (and no preferred stock). Its marginal tax rate is 40%. Marie's bonds have a YTM of 7.00%. The current stock price (Po) is $40. Next year's dividend is expected to be $2.60, and it is expected to grow at a constant rate of 5% per year forever.

A. The company's W.A.C.C. is ____%.

Reference no: EM13766831

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