company 10. Joy Corp. wants to calculate its weighted average cost of capital. The has no sufficient retained earnings to fund the equity portion of the capital budget. Additional information revealed the following: Dividend paid recently * Growth rate - 6% Flotation cost - 10% * Tax rate - 40% * Stock price P2.00 per share P 32.00 per share 9% * Bond YTM Target capital structure: 75% Equity; 25% Debt What is the company's WACC? .

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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I
I
w
Paragraph
✰
51
>
8
122
10. Joy Corp. wants to calculate its weighted average cost of capital. The
company
has no sufficient retained earnings to fund the equity portion of
the capital budget. Additional information revealed the following:
Growth rate - 6%
* Dividend paid recently .......P2.00 per share
Stock price
P 32.00 per share
9%
Bond YTM
Target capital structure: 75% Equity; 25% Debt
What is the company's WACC?
Styles
*Flotation cost - 10%
* Tax rate - 40%
Transcribed Image Text:I I w Paragraph ✰ 51 > 8 122 10. Joy Corp. wants to calculate its weighted average cost of capital. The company has no sufficient retained earnings to fund the equity portion of the capital budget. Additional information revealed the following: Growth rate - 6% * Dividend paid recently .......P2.00 per share Stock price P 32.00 per share 9% Bond YTM Target capital structure: 75% Equity; 25% Debt What is the company's WACC? Styles *Flotation cost - 10% * Tax rate - 40%
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