What is the company's WACC if all equity is from retained earnings?

A

Ashley

New member
Reingaart Systems is expected to pay a $3.00 dividend at year end (D1 = $3.00), the dividend is expected to grow at a constant rate of 8.00% a year, and the common stock currently sells for $60 a share. The before-tax cost of debt is 7.50%, and the tax rate is 40%. The target capital structure consists of 50.00% debt and 50.00% common equity. What is the company's WACC if all equity is from retained earnings?

Select the correct answer.

9.27%

9.79%

9.01%

9.53%
 
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