10. Firm P is a private firm preparing to IPO. An investment bank has gathered financial data. It deems a net-debt-to-market-equity ratio of 1 suitable, which would imply a 5.1% cost of debt. The tax rate is 32%. The risk-free rate is 2.5% and the market risk premium used currently by the bank is 6%. Industry peer data include the following (all amounts in millions of pounds except for stock prices; numberofshares in millions). What is an estimate of the firm's WACC? Book Stock Number PEERS equity price of shares Cash Comp 1 Comp 2 Book debt 234 52.3 12 102 55 288 24.8 19 201 122 1.22 Comp 3 171 13.3 27 56 125 0.75