Weighted average cost of capital for global corp

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Global Corp. has debt with a market value of $80,000 and common equity with a market value of $120,000. The US tax rate is 35 percent. It borrows Canadian dollars at 5 percent for a year. During the year, the Canadian dollars appreciate 3% relative to US dollars. Global Corp has just paid a dividend of $1.6 per share and expects dividends to grow at 5.6 percent indefinitely. The stock of Global Corp is currently sold at $85, and the flotation costs are $3 per share. What is the weighted average cost of capital for Global Corp.?

Reference no: EM133305434

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