The companys tax rate is 40 calculate the weighted average


Bennet Industries has 40 million of debt outstanding. It recently (last week) issued new bonds with a 4% coupon. Its stockholders equity is $45 million at book value and has 3 million shares outstanding at a price of $20 per share. A dividend of 80 cents per share is expected to be paid next year and this dividend is expected to grow at 4% per year indefinitely. The company's tax rate is 40%. Calculate the weighted average cost of capital for Bennet.

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Financial Management: The companys tax rate is 40 calculate the weighted average
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