What is the company wacc

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Mor & Otesi Systems Inc. is expected to pay a $7.50 dividend at year end, the dividend is expected to grow at a constant rate of 5% a year, and the common stock currently sells for $107 a share. The before-tax cost of debt is 10%, and the tax rate is 25%. The target capital structure consists of 45% debt and 55% common equity. What is the company's WACC if all the equity used is from retained earnings? Do not round your intermediate calculations.

Reference no: EM133253291

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