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14. Fresh, Inc.s target capital structure is 60% debt and 40% common stock. The companys outstanding annual coupon bonds have a yield-to-maturity of 10%. The

14. Fresh, Inc.s target capital structure is 60% debt and 40% common stock. The companys outstanding annual coupon bonds have a yield-to-maturity of 10%. The companys common stock sells for $20 per share. D1 = $2.00 and g = 0.04. The tax rate is 40%. What is the companys WACC?

a. 3.60%

b. 6.00%

c. 10.00%

d. 14.00%

e. None of the above

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