Timco uses a financial decision that is half debt and half equity.
June 7th, 2024
Timco uses a financial decision that is half debt and half equity. When we borrow new money, the interest rate will be 6%. Our tax rate is 40%. The firm has a beta of 2. The riskfree rate is .03 and we believe the market will earn 14%. Timco will only use retained earnings as equity. Find Timco’s WACC.