Jun 24, 2012, 03:29 PM
The Longview Company has 1 million shares of common stocks outstanding:13 per share. The firm's shows a long-term debt $7 million which the firm borrowed from Chase bank at 8% interest rate 5 years ago. Longview can obtain the same loan today at an interest rate of 4%. Chase just received an offer from Chase bank to buy Longview stock has a beta of 1.2 and is in the 34% marginal tax bracket. What is the WACC?