CALCULATING A FIRM’S WACC Nestle Enterprises is estimating its cost of capital
Question # 00105498
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Updated on: 09/20/2015 08:45 AM Due on: 10/20/2015
CALCULATING A FIRM’S WACC Nestle Enterprises is estimating its cost of capital for the first time and has made the following estimates: The firm’s debt carries an AAA rating, which is currently yielding 6%; the firm pays taxes at a rate of 30%; the cost of equity is estimated to be 14%; and the firm’s debt is equal to 20% of its enterprise value. What is Nestle’s WACC? Titman, Sheridan; Martin, John D. (2014-04-08). Valuation (2nd Edition) (Prentice Hall Series in Finance) (Page 136). Prentice Hall. Kindle Edition.
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Solution: CALCULATING A FIRM’S WACC Nestle Enterprises is estimating its cost of capital