Finance - Qualtric Inc.
Question # 00052753
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Updated on: 03/08/2015 03:25 AM Due on: 03/25/2015
Qualtric Inc. has a target capital structure of 35% debt and the remainder common equity. Qualtric Inc.’s cost of debt on the first $3 million borrowed is 7.5%, but that cost of debt increases to 8.0% for borrowing about the $3 million level. Its tax rate is 30%, its most recent dividend was $1.20 and that dividend has been growing at 2.5% annually and is expected to continue that growth. The current price of Qualtric Inc. stock is $18.50 per share. Flotation costs on new equity are 7.5% and Qualtric Inc. has retained earnings of $4.5 million. What is the WACC if Qualtric Inc.'s total capital expenditure is expected to be $6.5 million
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Rating:
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Solution: Finance - Qualtric Inc. Solution