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Assume Time Warner shares have a market capitalization of $40 billion. The company is expected to...

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?

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Particulars Equity capital amount $20.00 [amount /total] market value weights 0.5000 cost of capital 7.63% 0.25/40+0.07 [weig

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