Comert Co. has a current share price of $54 and a total of 14 million shares outstanding. The company currently

Comert Co. has a current share price of $54 and a total of 14 million shares outstanding. The company currently

Question:

Comert Co. has a current share price of $54 and a total of 14 million shares outstanding. The company currently has debt with a total face value of $995 million.  These outstanding 20 year bonds are currently priced to yield 6.2% while quoting at 99.5% of total face value.  The company will pay a dividend to common stock holders of $6.08 and anticipates growing the dividend at a constant rate of 4% per year indefinitely. 
 If the corporate tax rate is 34%, what is the WACC of Comert Company (in percent)?

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Answer rating: 100% (QA)

1 Calculate the cost of equity We can use the dividend growth model Cost of equity Dividend Equity V
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