What is the companys wacc

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A company fnances its operations with 40 percent debt and 60 percent equity. Its net income is I = $16 million and it has a dividend payout ratio of x = 25%. Its capital budget is B = $15 million this year. The annual yield on the company.s debt is rd = 10% and the company.s tax rate is T = 30%.

The company's common stock trades at Po = $55 per share, and its current dividend of Do = $5 per share is expected to grow at a constant rateof g = 10% a year. The flotation cost of external equity, if it is issued, is F = 5% of the dollar amount issued. What is the company.s WACC?

Reference no: EM133290939

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