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← Time Warner shares have a market capitalization of $55 billion. The company just paid a dividend of $0.45 per share. and each share trades for $25. The growth rate in dividends is expected to be 6% per year. Also, Time Warner has $15 billion of debt that trades with a yield to maturity of 7%. If the firm's tax rate is 25%, compute the WACC? OA. 7.34% OB. 8.07% OC. 6.97% OD. 8.44% BITE

← Time Warner shares have a market capitalization of $55 billion. The company just paid a dividend of $0.45 per share. and each share trades for $25. The growth rate in dividends is expected to be 6% per year. Also, Time Warner has $15 billion of debt that trades with a yield to maturity of 7%. If the firm's tax rate is 25%, compute the WACC? OA. 7.34% OB. 8.07% OC. 6.97% OD. 8.44% BITE

Essentials Of Investments
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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K Time Warner shares have a market capitalization of $55 billion. The company just paid a dividend of $0.45 per share and each share trades for $25. The growth rate in dividends is expected to be 6% per year. Also, Time Warner has $15 billion of debt that trades with a yield to maturity of 7%. If the firm's tax rate is 25%, compute the WACC? OA. 7.34% B. 8.07% OC. 6.97% D. 8.44%
Transcribed Image Text:K Time Warner shares have a market capitalization of $55 billion. The company just paid a dividend of $0.45 per share and each share trades for $25. The growth rate in dividends is expected to be 6% per year. Also, Time Warner has $15 billion of debt that trades with a yield to maturity of 7%. If the firm's tax rate is 25%, compute the WACC? OA. 7.34% B. 8.07% OC. 6.97% D. 8.44%
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