Find what is penny blossom wacc

Assignment Help Financial Accounting

Reference no: EM132808142

1. Penny Blossoms has a target capital structure of 40% debt and 60% equity. Its cost of equity is 1%, cost of debt is 5%, and its tax rate is 25%.

Problem a. What is Penny Blossom's WACC?

Problem b. What would happen to the WACC if it changed its capital structure to 50%/50% (no math just theory, explain your answer)?

Reference no: EM132808142

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