If the firms tax rate is 30 percent what is its rw acc

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Reference no: EM131881487

The common equity shares of Charter Communications (the owners of Spectrum, previously known as Time Warner Cable) trade at a price of $320 and there are 270 million shares outstanding.

The company is expected to pay a dividend of $0.36 per share next year. The growth rate in dividends is expected to be 7% per year.

Also, Charter has $59.7 billion of debt that trades with a yield to maturity of 4%. Additionally, Charter has $1.5 billion of preferred equity shares that trade at a price of $25.96 and pay an annual dividend of $1.50. If the firms tax rate is 30%, what is its rW ACC?

Hint: to find the market value of equity (E) multiply the total number of shares by their price.

Reference no: EM131881487

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