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What is its weighted average cost of capital

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Question - Greens, Inc. is an MNC located in the U.S. The firm would like to estimate its weighted average cost of capital (WACC). On average, bonds issued by Greens yield 9 percent. Currently, Treasury security rates are 3 percent. Furthermore, Greens' stock has a beta of 1.5, and the return on the S&P500 stock index is expected to be 10 percent. Greens' target capital structure is 30 percent debt and 70 percent equity. If Greens is in the 35 percent tax bracket, what is its weighted average cost of capital?

Reference no: EM133078209

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