Power Financial Corp Has a Current Share Price of $34,and

question 34

Multiple Choice

Power Financial Corp has a current share price of $34,and a market capitalization of $24 billion.The company is expected to pay a dividend of $0.37 per share,with a dividend growth rate of 4% per year.The firm has $18 billion of debt with a yield to maturity of 6%.If the firm's tax rate is 30%,what is Power Financial's WACC?

• A)5.00%
• B)4.65%
• C)4.71%
• D)5.49%
• E)5.55%

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Definitions:

Overweight

Being overweight is having a body weight above the standard weight range for one's height, which can lead to health problems.

BMI

Body Mass Index (BMI) is a measure that uses height and weight to estimate a person's body fat.

Selective Optimization

A strategy of focusing on and optimizing resources on selected areas while letting go or reducing investment in others.

Compensation

Payment or remuneration provided for services rendered or as reparation for injury or loss.