Xanda Construction is considering increasing production of its XYZ widget at its South Carolina assembly plant....
- Xanda Construction is considering increasing production of its XYZ widget at its South Carolina assembly plant. You have been provided the following pieces of information about Xanda.
- Its stock price is $30. They just paid a dividend of $1.60. The stocks beta is 1.3. The risk-free rate is 4% and the market return is estimated to be 12%. The dividend will grow at a constant rate of g where g > 0.
- Its bonds sell for $905. They pay semi-annually; have 10 years to maturity, a coupon rate of 6% and par value of $1,000.
- The company’s marginal tax rate is 40%.
- Its target capital structure of the project is 65% equity and 35% debt
Based on this information, Xanda's WACC is ______%.
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Xanda Construction is considering increasing production of its
XYZ widget at its South Carolina assembly plant....
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