Homework answers / question archive / CoffeeStop primarily sells coffee

CoffeeStop primarily sells coffee

Finance

Share With

CoffeeStop primarily sells coffee. It recently introduced a premium? coffee-flavoured liqueur. Suppose the firm faces a tax rate of 38% and collects the following information. If it plans to finance 15% of the new? liqueur-focused division with debt and the rest with? equity, what WACC should it use for its liqueur? division? Assume a cost of debt of 5.4%?, a? risk-free rate of 3.4% and a risk premium of 5.4%.

The weighted average cost of capital is____%.? (Round to two decimal? places.)