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Cardstock Co. has a beta of 1.2. The expected return on the market is 13% and the risk-free rate is 6%. The yield-to-maturity (YTM) on
Cardstock Co. has a beta of 1.2. The expected return on the market is 13% and the risk-free rate is 6%. The yield-to-maturity (YTM) on their outstanding bonds is 7.5% and the marginal tax rate is 21%. Based on the balance sheet values, Cardstock currently has 40% debt and 60% equity. However, its target capital structure is 30% debt and 70% equity. How much is the WACC of this company?
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11.86%
12.33%
9.32%
16.90%
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