What is rollins weighted average cost capital


Rollins Corporation is estimating its WACC. It’s current and target capital structure is 40 percent debt and 60 percent common equity. Its bonds have a 12 percent coupon, paid semiannually, a current maturity of 20 years, and sell for $1,040. Rollins' beta is 1.2, and the risk-free rate is 10 percent. Rollins is a constant-growth firm which just paid a dividend of $2.00. Its stock sells for $27.00 per share, and has a growth rate of 8 percent. The firm's marginal tax rate is 40 percent.

What is Rollins' weighted average cost capital WACC?

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Financial Management: What is rollins weighted average cost capital
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