ABC Company Has a Capital Structure with Debt and Equity

question 4

Essay

ABC company has a capital structure with debt and equity.Debt - $50 million face value bonds maturing in 15 years with a coupon rate of 4% paid semi-annually.Similar bonds are selling at 97.5.Equity - There are 2,000,000 shares outstanding.The investor's return is 10%.The next dividend is $3.5 with a growth rate of 4% into the future.Tax rate is 30%.Given the following information, calculate its WACC.

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Definitions:

Social Media

Online platforms and technologies that enable users to create, share content, or participate in social networking.

Stakeholder Engagement

The practice of actively involving individuals or groups who may be affected by or have an interest in a project or decision of an organization.

Corporate Social Responsibility

A business model where companies integrate social and environmental concerns in their operations and interactions with their stakeholders, aiming to have a positive impact on society.

Participatory Initiatives

Programs or projects designed to actively involve stakeholders, especially the community or employees, in decision-making or activities.