What is cordell wacc

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Reference no: EM132055074

Assume that you are on the financial staff of Cordell Enterprises, and you have collected the following data: (1) The yield to maturity on the company's outstanding 7% annual coupon bonds is 5.5%, and its tax rate is 40%. (2) The risk-free rate is 3%, the market risk premium (rM - rRF) is 5%, and the firm's beta is 1.1. (3) The firm's capital structure consists of 55% debt and 45% equity. What is Cordell's WACC?

a. 4.75%

b. 5.00%

c. 5.64%

d. 6.14%

e. 6.89%

Reference no: EM132055074

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