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What is the wacc for abc

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ABC Bank has a target debt to equity ratio of 2.5 and currently does not have any preferred stock outstanding. The cost of debt for ABC is 9 percent and the appropriate tax rate is 35 percent. ABC's common stock is currently trading for $52 per share and is expected to pay a dividend of $3 next year. In addition, the market expects dividends to grow at a rate of 3 percent indefinitely. What is the WACC for ABC?

Reference no: EM132465924

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