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DEC Inc. recently hired you as a consultant to estimate the company s WACC. You have obtained the following information. ( 1 ) The firm's

DEC Inc. recently hired you as a consultant to estimate the companys WACC. You have obtained the following information. (1) The firm's bonds have YTM of 10%.(2) The companys tax rate is 30%.(3) The risk-free rate is 3.5%, the market risk premium is 5.5%, and the stocks beta is 1.35.(4) The target capital structure has a debt-to-equity ratio equals to 1.5. The firm uses the CAPM to estimate the cost of common stock, and it does not expect to issue any new shares. What is its WACC?

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