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What is weighted average cost of capital for easy car corp

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Problem 1: Easy Car Corp. is a grocery store located in the Southwest. It paid an annual dividend of $4.00 last year to its shareholders and plans to increase the dividend annually at the rate of 5.0%. It currently has 1,000,000 common shares outstanding. The shares currently sell for $16 each. Easy Car Corp. also has 50,000 semiannual bonds outstanding with a coupon rate of 0%, a maturity of 24 years, 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 {WAGE} for Easy Car Corp. if the corporate tax rate is 20%?

Reference no: EM132740955

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