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21) The book values of ABC companys debt and equity are $20 million and $16 million, respectively. The debt is currently trading at 120 per
21) The book values of ABC companys debt and equity are $20 million and $16 million, respectively. The debt is currently trading at 120 per cent of its par value. The YTM of the bonds is 7 per cent. The company has 2 million shares outstanding which are trading at a market price of $19 per share. The equity cost of capital of the company is 12 per cent. If the corporate tax rate is 35 per cent, the ABC companys WACC is equal to:
10.03%
9.12%
7.29%
9.57%
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