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What is the weighted average cost of capital

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Reference no: EM133020276

Question - Easy Car Corp. is a grocery store located in the Southwest. Next year dividend is ?$4.00 and plans to increase the dividend annually at the rate of 3.0?%. It currently has 1,000,000 common shares outstanding. The shares currently sell for ?$13 each. Two years ago, Easy Car Corp. issued 40,000 semiannual 25-year bonds with a coupon rate of 10?% and a par value of ?$1,000. The bonds currently have a yield to maturity? (YTM) of 11%. What is the weighted average cost of capital (WACC) for Easy Car Corp. if the corporate tax rate is 20%?

Reference no: EM133020276

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