What is GPCs current equilibrium stock price

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Gator Products Company (GPC) is at its optimal capital structure of 70 percent common equity and 30 percent debt. GPC’s WACC is 14 percent. GPC has a marginal tax rate of 40 percent. Next year’s dividend is expected to be $2 per share, and GPC has a constant growth in earnings and dividends of 6 percent. The cost of common equity used in the WACC is based on retained earnings, while the before-tax cost of debt is 12 percent. What is GPC’s current equilibrium stock price?

Reference no: EM13826775

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