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What is the weighted average cost of capital for easy car co

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Problem 1: Easy Car Corp. is a grocery store located in the Southwest. It paid an annual dividend of ?$2.00 last year to its shareholders and plans to increase the dividend annually at the rate of 3.0?%. It currently has 1,000,000 common shares outstanding. The shares currently sell for ?$16 each. Easy Car Corp. also has 10,000 semiannual bonds outstanding with a coupon rate of 6?%, a maturity of 22 ?years, and a par value of ?$1,000. The bonds currently have a yield to maturity? (YTM) of 14%. What is the weighted average cost of capital (WACC) for Easy Car Corp. if the corporate tax rate is 20%?

Reference no: EM132761811

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