Pjas pre-tax cost of debt is 5 and it targets a debt ratio


Straight Up Dance Studios, Inc. (Ticker: PJA) has a 20% dividend payout ratio and is expecting EPS of $6.00 next year, up from $5.40 last year and PJA shares currently trade at $12 per share.

PJA's pre-tax cost of debt is 5% and it targets a debt ratio of 50%. If PJA's corporate tax rate is 30%, what is PJA's WACC?

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Financial Management: Pjas pre-tax cost of debt is 5 and it targets a debt ratio
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