CoffeeStop primarily sells coffee It recently introduced a

Last updated: 8/1/2023

CoffeeStop primarily sells coffee It recently introduced a premium coffee flavored liquor BF Liquor Suppose the firm faces a tax rate of 40 and collects the following information If it plans to finance 15 of the new liquor focused division with debt and the rest with equity what WACC should it use f its liquor division Assume a cost of debt of 5 1 a risk free rate of 2 5 and a market risk premiun of 6 8 CoffeeStop BF Liquors The weighted average cost of capital is Beta 0 62 0 23 Equity 96 85 Debt 4 15 Round to two decimal places