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    azjuggalo's Avatar
    azjuggalo Posts: 1, Reputation: 1
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    #1

    Jan 13, 2012, 01:30 PM
    What is the WACC?
    Bob's Country Bunker (BCB), a chain of economically priced motels in the Midwestern United States has reviewed its current target structure of 40% debt and 60% equity. It can issue debt at a rate of 9%. The last dividend paid on its stock was $1.25. The company is doing very well and expects to maintain its current growth rate of 5%. The firm's tax rate is 35%, and the common stock currently sells at $29. The company is considering two projects: Project A which has an expected rate of return of 14%, and Project B which has an expected rate of return of 10%. Both projects are equally risky and the firm can accept both.
    tickle's Avatar
    tickle Posts: 23,796, Reputation: 2674
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    #2

    Jan 13, 2012, 01:35 PM
    You haven't been doing your homework, jugaloo. Why would you come asking us to do the wacc for you ?
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