Soggy Eggs has a share price of $32, and 2.000.000 shares outstanding. They also have 48,000, $1000 face value, bonds outstanding with a current price of $976 They will pay a dividend of $3.2 next year and will grow that dividend by 4% forever. Soggy Eggs required return on equity is 14% the risk free rate is 2.5%. The cost of debt after taxes is 5.7%. Soggy Eggs has a corporate tax rate of 26%. What is the Weighted Average Cost of Capital (WACC) of Soggy Eggs? 10.49% 08.30% 11.48% 8.42%

Soggy Eggs has a share price of $32, and 2.000.000 shares outstanding. They also have 48,000, $1000 face value, bonds outstanding with a current price of $976 They will pay a dividend of $3.2 next year and will grow that dividend by 4% forever. Soggy Eggs required return on equity is 14% the risk free rate is 2.5%. The cost of debt after taxes is 5.7%. Soggy Eggs has a corporate tax rate of 26%. What is the Weighted Average Cost of Capital (WACC) of Soggy Eggs? 10.49% 08.30% 11.48% 8.42%

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter15: Dividend Policy

Section: Chapter Questions

Problem 15P

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