+1 (347) 474-1028 info@essayparlour.com

Midwest Electric Company (MEC) uses only debt and common equ

Thesis Help Finance Midwest Electric Company (MEC) uses only debt and common equ

Finance

Midwest Electric Company (MEC) uses only debt and common equ

Midwest Electric Company (MEC) uses only debt and common equity. It can borrow unlimited amounts at… Show more Midwest Electric Company (MEC) uses only debt and common equity. It can borrow unlimited amounts at an interest rate of rd = 11% as long as it finances at its target capital structure, which calls for 30% debt and 70% common equity. Its last dividend (D0) was $1.80, its expected constant growth rate is 3%, and its common stock sells for $21. MEC’s tax rate is 40%. Two projects are available: Project A has a rate of return of 15%, while Project B’s return is 10%. These two projects are equally risky and about as risky as the firm’s existing assets. What is its cost of common equity? Round your answer to two decimal places. What is the WACC? Round your answer to two decimal places • Show less

Order Now

Ready to try a high quality writing service? Get a discount here