Develop the weighted average cost of capital wacc for a


Develop the Weighted Average Cost of Capital (WACC) for a business. 

Given the following inputs and assumptions, estimate the WACC for Gallo Distributors, Inc.:

  • Risk-free rate: 1%
  • Equity risk premium: 5%
  • Beta: .85
  • Size Premium: 6%
  • Company Specific Risk Premium: 1%
  • Pre-tax borrowing rate: 5.5%
  • Fair Market Value of Debt to Fair Market Value of Invested Capital: 20%

Solution Preview :

Prepared by a verified Expert
Basic Computer Science: Develop the weighted average cost of capital wacc for a
Reference No:- TGS01589567

Now Priced at $20 (50% Discount)

Recommended (95%)

Rated (4.7/5)