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What is gessinger wacc for gessinger enterprises

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Reference no: EM132985627

WACC calculation(rMRF)

Problem 1: Assume that you are on the financial staff of Gessinger Enterprises, and you have collected the following data: (1) The yield to maturity on the company's outstanding 9% annual coupon bonds is 8%, and its tax rate is 25%. (2) The risk-free rate is 3.5%, the market risk premium- r) is 5.5%, and the firm's beta is 0.75. (3) The firm's capital structure consists of 40% debt and 60% equity. What is Gessinger's WACC?

a. 6.0750%

b. 6.5750%

c. 6.9750%

d. 7.1250%

e. 8.0375%

Reference no: EM132985627

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