Time Warner Shares Have a Market Capitalization of $60 Billion

question 23

Multiple Choice

Time Warner shares have a market capitalization of $60 billion.The company is expected to pay a dividend of $0.35 per share and each share trades for $30.The growth rate in dividends is expected to be 8% per year.Also,Time Warner has $15 billion of debt that trades with a yield to maturity of 7%.If the firm's tax rate is 30%,compute the WACC?

• A)7.45%
• B)7.91%
• C)8.11%
• D)8.31%

---

Definitions:

Gifted Individuals

People who exhibit high levels of aptitude or competence in one or more domains at levels significantly beyond what is considered typical for their age.

Savant Syndrome

A rare condition where an individual with significant mental disabilities demonstrates profound capacities or abilities in a specific area, such as memory, music, art, or calculation.

Phenylketonuria

A genetic disorder characterized by the body's inability to break down the amino acid phenylalanine, leading to harmful levels in the blood.

Hydrocephaly

A condition characterized by an abnormal accumulation of cerebrospinal fluid (CSF) in the ventricles, or cavities, of the brain, leading to increased intracranial pressure.