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Whispering Pines, Inc. is all-equity-financed. The expected rate of return on the shares is 12%.

  • From Business, Finance
  • Due on 02 Aug, 2016 12:00:00
  • Asked On 02 Aug, 2016 03:09:10
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Whispering Pines, Inc. is all-equity-financed. The expected rate of return on the shares is 12%. Calculate the opportunity cost of capital for an average-risk Whispering Pines investment. Next, suppose the company issue debt, repurchases shares, and moves to a 30% debt to value ratio (D/V=.30). Calculate the company’s weighted-average cost of capital at the new capital structure. The borrowing rate is 7.5% and the tax rate is 35%.



Based on the WACC calculation, provide a one –to -two page paper summarizing your recommendations for Whispering Pines.

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[Solved] Whispering Pines, Inc.

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  • Submitted On 02 Aug, 2016 04:18:30
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please check attachment Whispering Pines, Inc. is all-equity-financed. The expected rate of return on the shares i...
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