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A company has $100 million worth of bonds outstanding with a yield to maturity of 4% and 25 million common shares outstanding worth $10 each.
A company has $100 million worth of bonds outstanding with a yield to maturity of 4% and 25 million common shares outstanding worth $10 each. The company's tax rate is 35%, beta is 1.1, the yield on 10-year Treasury notes is 2% and the expected market return is 9%. What is the company's weighted average cost of capital (WACC) based on the current weights for debt and common stock in its capital structure?
1.11.78%
2.9.29%
3.10.60%
4.7.67%
5.8.21%
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