Question

Question

Here is Establishment Industries’ market-value balance sheet  />         Net working capital$640    Debt$950    Long-term assets 2,360    Equity 2,050      Value of firm$3,000   $3,000    
 The debt is yielding 6.7%, and the cost of equity is 14.3%. The tax rate is 29%. Investors expect this level of debt to be permanent.
 a.What is Establishment’s WACC? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
   WACC %  

  />         Net working capital$640    Debt$950    Long-term assets 2,360    Equity 2,050      Value of firm$3,000   $3,000    
 The debt is yielding 6.7%, and the cost of equity is 14.3%. The tax rate is 29%. Investors expect this level of debt to be permanent.
 a.What is Establishment’s WACC? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
   WACC %  

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