*I know the answer is 13.88. Can someone please show me the steps? * Easy Car Corp. is a grocery store located in the So
Posted: Sun Jul 03, 2022 12:57 pm
*I know the answer is 13.88. Can someone please show me thesteps? *
Easy Car Corp. is a grocery store located in the Southwest. Itpaid an annual dividend of $2.00 last year to its shareholders andplans to increase the dividend annually at the rate of 4.0%. Itcurrently has 2,000,000 common shares outstanding. The sharescurrently sell for $14 each. Easy Car Corp. also has 30,000semiannual bonds outstanding with a coupon rate of 10%, a maturityof 26 years, and a par value of $1,000. The bonds currently havea yield to maturity (YTM) of 11%. What is the weighted averagecost of capital (WACC) for Easy Car Corp. if the corporate tax rateis 20%?
Easy Car Corp. is a grocery store located in the Southwest. Itpaid an annual dividend of $2.00 last year to its shareholders andplans to increase the dividend annually at the rate of 4.0%. Itcurrently has 2,000,000 common shares outstanding. The sharescurrently sell for $14 each. Easy Car Corp. also has 30,000semiannual bonds outstanding with a coupon rate of 10%, a maturityof 26 years, and a par value of $1,000. The bonds currently havea yield to maturity (YTM) of 11%. What is the weighted averagecost of capital (WACC) for Easy Car Corp. if the corporate tax rateis 20%?