Calculating the WACC In Problem 13.14, suppose the companys equity has a beta of 1.2. The risk-free

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Calculating the WACC In Problem 13.14, suppose the company’s equity has a beta of 1.2. The risk-free rate is 5.2 per cent, and the market premium is 9 per cent.

Assume that the overall cost of debt is the weighted average cost of two outstanding debt issues. Both bonds make semi-annual payments. The tax rate is 28 per cent.

What is the company’s WACC? Assume the face value of the debt is £1,000.

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