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Author Question: Assume that you are on the financial staff of Michelson Inc., and you have collected the following ... (Read 15 times)

jany123

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on: Aug 7, 2023
Assume that you are on the financial staff of Michelson Inc., and you have collected the following data:

– The yield on the company’s outstanding bonds is 9%, and its tax rate is 38%.

– The next expected dividend is $0.76 a share, and the dividend is expected to grow at a constant rate of 7% a year.

– The price of Michelson’s stock is $18.30 per share, and the flotation cost for selling new shares is F = 11%.

– The target capital structure is 48% debt and the balance is common equity.

What is Michelson’s WACC, assuming it must issue new stock to finance its capital budget?


◦

9.05%


◦

8.42%


◦

8.75%


◦

9.03%

Financial Management: Theory and Practice ¦ Brigham, Ehrhardt, Gessaroli, Nason ¦ 4th Edition
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Marked as best answer by jany123 on Aug 7, 2023

mamboz

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Reply #1 on: Aug 7, 2023
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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jany123

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Reply 2 on: Aug 7, 2023
Great answer, keep it coming :)

Sarahjh

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Reply 3 on: Yesterday
Excellent

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