Johnson industries finance its project with 40 debt and 60


Johnson Industries finance its project with 40% debt and 60% common stock.

            The company can issue a bond at the yield of 8.4%.

            The risk free rate is 6.57%.

            The market risk premium is 5%.

            Johnson Industries beta is 1.3.

            The company’s tax rate is 30%.

What is the company’s weighted average cost of capital?

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Financial Management: Johnson industries finance its project with 40 debt and 60
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