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Weighted cost of capital-bluegrass mint company

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Reference no: EM133062409

Bluegrass Mint Company has a debt-equity ratio of 0.34. The required return on the company's unlevered equity is 12.4% and the pretax cost of the firm's debt is 5.8%. Sales revenue for the company is expected to remain stable indefinitely at last year's level of $22,142,403.3. Variable costs amount to 62% of sales. The tax rate is 33% and the company distributes all its earnings as dividends at the end of each year.

What is the Weighted Cost of Capital?

HINT: You will need the return of Levered Equity. Follow the process that you used to determine the answer to the previous problem

NOTE: Enter the PERCENTAGE number rounding to two decimals. If your decimal answer is 0.034576, your answer must be 3.46. DO NOT USE the % sign

Reference no: EM133062409

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