Compute abts average borrowing rate and its market, Financial Management

Compute abts average borrowing rate and its market

Estimating Components of both WACC and DDM

Analysts estimate the cost of debt capital for Abbott Laboratories (NYSE: ABT) is 2.34% and that its cost of equity capital is 4.1%. Assume that ABT's marginal tax rate is 36%, the risk-free rate is 5.5%, the market risk premium is 5.9%, the ABT market price is $47.73 per common share, and its dividends are $1.26 per common share.

(a) Compute ABT's average borrowing rate and its market beta. (Round your answers to one decimal place.)

Average borrowing rate =

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Financial Management: Compute abts average borrowing rate and its market

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