Calculate WACC
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Nathan's Catering is a gourmet catering service located in Southampton, New York. It has an unleveraged required return of r=43%. Nathan's rebalances its capital structure each year to a target of L=0.52. T*=0.20. Nathan's can borrow currently at a rate of rd=26%. What is Nathan's WACC?
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The expert calculates the WACC.
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If L means debt ratio (=D/(D+E)), assume D=52, E=48
Levered required ...
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