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We are analyzing Sailing Boat Co and we have the following information: The company...

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Finance

We are analyzing Sailing Boat Co and we have the following information:

  • The company has a total EV of 5,000 million Eur of which the Weight of Equity is 90% and the Weight of Debt is 10%.
  • The stock has a beta of 0.83.
  • The required equity return for the market is 7.5% and the risk-free rate of return is 2.5% percent.
  • The company has bonds that are offering a YTM of 4.0%.
  • The corporate tax rate is 32%.

Using CAPM approach for the cost of equity, what is the appropriate WACC (Weighted Average Cost of Capital) for Sailing Boat Co.?

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