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26-04-2024
Business

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Billick Brothers is estimating its WACC. The company has collected the following information:

Its capital structure consists of 40 percent debt and 60 percent common equity.
The company has 20-year bonds outstanding with a 10 percent annual coupon that are trading at par.
The company's tax rate is 30 percent.
The risk-free rate is 5 percent.
The market risk premium is 6 percent.·

The stock's beta is 1.5.What is the company's WACC?

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