and 40% in equity. Therefore, the company plans to raise $100 million in according with the current capital structure. Compute the weighted average cost of capital (WACC) to raise $100 million. Use the following information: real risk free rate is 2%; inflation premium = 2%; liquidity premium for its debt instrument = 0.5%; maturity premium for the 10 year coupon bond = 1.5%; default risk premium = 0.5%; tax rate = 26%; required rate of returns on the stock market = 8%; the beta of this company stock = 1.2.

and 40% in equity. Therefore, the company plans to raise $100 million in according with the current capital structure. Compute the weighted average cost of capital (WACC) to raise $100 million. Use the following information: real risk free rate is 2%; inflation premium =2%; liquidity premium for its debt instrument =0.5%; maturity premium for the 10 year coupon bond =1.5%; default risk premium =0.5%; tax rate =26%; required rate of returns on the stock market =8%; the beta of this company stock =1.2