Assume Time Warner Shares Have a Market Capitalization of $40

question 61

Multiple Choice

Assume Time Warner shares have a market capitalization of $40 billion. The company is expected to pay a dividend of $0.25 per share and each share trades for $40. The growth rate in dividends is expected to be 7% per year. Also, Time Warner has $20 billion of debt that trades with a yield to maturity of 9%. If the firm's tax rate is 40%, what is the WACC?

• A) 5.85%
• B) 6.54%
• C) 6.88%
• D) 7.57%

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Definitions:

Data Transfer

The process of moving or copying data from one location to another, either within the same device or across different ones.

Data Compare

a process or operation in computing and programming that involves comparing two sets of data to identify similarities, differences, or specific conditions.

Output Instructions

Commands in a programming language that control the output actions of a device or system.

Input Modules

Hardware components in a control system that receive and process signals from sensors or other input devices.