Calculate the cost of capital for operations wacc for acme


Calculate the cost of capital for operations (WACC) for ACME, Inc. Use the capital asset pricing model to estimate the cost of equity capital.

U.S. Government long-term bond rate                             2.80%

Market risk premium                                                        5.00%

Equity beta                                                                        1.04

Per-share market price                                                $65.00

Shares outstanding                                                        20.0 million

Net financial obligations on balance sheet                 $700.0 million

Weighted-average borrowing cost                                   7.6%

Statutory tax rate                                                            21.0%

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Financial Management: Calculate the cost of capital for operations wacc for acme
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