AnastasiaJauregui
AnastasiaJauregui
26.08.2021 • 
Business

How does a higher beta affect WACC and why? What is the WACC for a public utility given the following information: beta: 0.8, expected rate of return on the S&P 500: 12.4%,
risk-free rate (T-bill yield): 4%,
yield to maturity on long-term bonds: 7.2%,
required rate of return on preferred stock: 7.5%,
common equity ratio: 60%,
debt ratio: 30%,
preferred stock ratio: 10% and an effective corporate tax rate: 30%.

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