What is MNINKs WACC if the firm faces average tax rate

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Reference no: EM131925150

1. Lauryn’s asset beta is 1.22. Calculate the appropriate FCF discount rate assuming a risk-free rate of 5 percent and a market risk premium of 7 percent.

Discount rate ________

2. Suppose that MNINK Industries’ capital structure features 63 percent equity, 8 percent preferred stock, and 29 percent debt. Assume the before-tax component costs of equity, preferred stock, and debt are 11.70 percent, 9.60 percent, and 9.00 percent, respectively. What is MNINK’s WACC if the firm faces an average tax rate of 34 percent? (Round your answer to 2 decimal places.)

Reference no: EM131925150

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