What is company weighted average cost of capital

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Question

Munich Re Inc. is expected to pay a dividend of $4.82 in one year, which is expected to grow by 4% a year forever. The stock currently sells for $76 a share.

The before-tax cost of debt is 9% and the tax rate is 34%.

The target capital structure consists of 20% debt and 80% equity.

What is the company's weighted average cost of capital?

Reference no: EM133227575

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