Calculating wacc


Calculating WACC

Here is some information about Stokenchurch Inc.: Beta of common stock = 1.2

Treasury bill rate = 4%

Market risk premium = 7.5%

Yield to maturity on long-term debt = 6% Book value of equity = $440 million Market value of equity = $880 million Long-term debt outstanding = $880 million Corporate tax rate = 35%

Required:

Question: What is the company's WACC?

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Finance Basics: Calculating wacc
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