ABC Corporation has 2.8 million shares of stock outstanding. The stock currently sells for $50 per share. The firms debt is publically traded and was recently quoted at 95 percent of its face value. It has a total face value of $10 million, and it is currently priced to yield 12 percent. The risk-free rate is 5 percent, and the market risk premium is 7 percent. Youve estimated that ABC has a beta of 1.25. If the corporate tax rate is 35 percent, what is the WACC of ABC Corporation?

Multiple Choice

• 9.38%

• 10.88%

• 11.38%

• 12.88%

• 13.38%