What is the firm cost of equity and what is the firm wacc

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Reference no: EM131617343

DEF Corp. has a target capital structure of 40% debt and 60% common stock. The company's outstanding annual coupon bonds have a yield to maturity of 8.5%. The company's common stock sells for $30 per share, D1 = $2.25 and g = .03. The company's tax rate is 37.5%. 1. What is the firm's cost of equity, 2. and what is the firm's WACC. Please show your work.

Reference no: EM131617343

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