Lululemon Athletica has a current share price of $50,and a market capitalization of $7 billion.The firm's beta is 0.27,the risk-free rate is 2.4%,and the market risk premium is 6%.The firm has $4 billion of debt with a yield to maturity of 8%.If the firm's tax rate is 35%,what is Lululemon's WACC?
A) 7.24%
B) 4.45%
C) 4.61%
D) 4.71%
E) 6.01%
Correct Answer:
Verified
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