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You are trying to determine the WACC for White Sox. It has thefollowing characteristics. (12 points)Discount rate of 10%. The company had pre-tax netincome of $50mm last year and paid taxes of $10mm.White Sox has $900mm of total liabilities, $100mm of accountspayable, and $650mm of debt.The company has 120mm shares authorized, 17mm shares issued,and 7mm shares of treasury stock. The stock traded at$65 per share two years ago and now trades at $97.87 pershare.A 10-year senior bond was issued 1 year ago. It is priced at 97today. The coupon rate is 6% paid semi-annually. Use the YTM onthis bond as a proxy for the pre-tax cost of total debt.The company pays a dividend of $.75 per share per quarter.Twelve years ago, the dividend was $0.30 per share. The ten-yeartreasury rate is 2%. The company’s Beta is 1.5 and the marketreturn for equities is 8%.Cost of Equity – CAPMCost of Equity – Gordon GrowthPre-tax cost of debtAfter-tax cost of debtTotal CapitalWACC (use average of CAPM and GGM for cost ofequity)