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A company is financed with 60% debt and 40% common equity, they use no preferred equity in their capital structure. The company cost of debt
A company is financed with 60% debt and 40% common equity, they use no preferred equity in their capital structure. The company cost of debt is 6.5% before taxes. The companys equity beta is 1.18. The current equity market risk premium is 6% and the risk free rate is 1%. If the companys tax rate is 35%, what is the companys weighted average cost of capital (WACC)?
A. 4.77%
B. 6.52%
C. 6.32%
D. 5.77%
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