Dinklage Corp. has 6 million shares of common stock outstanding. The current share price is $78, and the book value per share is $5.

The company also has two bond issues outstanding. The first bond issue has a face value of $65 million, a yield to maturity of 7.18 percent, and sells for 98 percent of par. The second issue has a face value of $35 million, a yield to maturity of 6.57 percent, and sells for 106 percent of par. The first issue matures in 22 years, the second in 5 years.

Suppose the most recent annual dividend was $5.00 and the annual dividend growth rate is 8 percent. The tax rate is 30 percent. Calculate the companys WACC.

Start by calculating the firm's market value.

(Enter your answer as a dollar amount, not millions of dollars, i.e. enter one million as 1,000,000)

Firm's Market Value (debt & equity)

$

Now calculate the firm's cost of equity and after-tax cost of debt.

(Enter your answers as percent rounded to two decimals. Assume the YTMs are quoted as an EAR, not an APR.)

Cost of Equity

%

After-tax Cost of Debt

%

Now calculate the WACC.

(Don't round your intermediate steps and enter your answer as a percent rounded to two decimals.)

WACC

%