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A company has a 50/50 mix of Debt and Equity. The YTM on it's debt is 7.5%. Interest rates are 4.5%. Tax rates are 20%.
A company has a 50/50 mix of Debt and Equity. The YTM on it's debt is 7.5%. Interest rates are 4.5%. Tax rates are 20%. It's required return on Equity is 12.5%. What is the company's WACC?
A: 8.65%
B: 9.25%
C: 10%
D: 8.5%
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