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What will be the wacc for the project of kuhn

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Problem 1: Kuhn does not have any retained earnings available to finance this project, so the firm will have to issue new common stock to help fund it. Its common stock is currently selling for $33.35 per share, and it is expected to pay a dividend of $1.36 at the end of next year. Flotation costs will represent 3% of the funds raised by issuing new common stock. The company is projected to grow at a constant rate of 9.2%, and they face a tax rate of 25%. What will be the WACC for this project?

Answer choices:

Option 1: 11.06%
Option 2: 10.05%
Option 3: 8.54%
Option 4: 9.55%

Reference no: EM132933383

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