Cavernbridge stock trades for $33 per share. It is expected to pay a $2.5 dividend at year end,and the dividend is expected to grow at a constant rate of 3.3% a year. The before-tax cost of debt is 5.1%, and the tax rate is 30%. The target capital structure consists of 40% debt and 60% common equity. What is the Cavernbridge's WACC (in percent) if all the equity used is from reinvested earnings?
Get Answers For Free
Most questions answered within 1 hours.