Dinklage Corp. has 8 million shares of common stock outstanding. The current share price is $87, and the book value per share is $6. The most recent annual dividend, paid this morning, was $5.90 and the dividend growth rate is 7 percent.

The company also has two bond issues outstanding. The first bond issue has a face value of $75 million, a coupon rate of 10%, a yield to maturity of 10.34%, and sells for 97 percent of par. The second issue has a face value of $50 million, a coupon rate of 11%, a yield to maturity of 9.99%, and sells for 105 percent of par. The first issue matures in 25 years, the second in 7 years.

The tax rate is 35 percent. Calculate the companys WACC.

Start by calculating the capital structure weights.

Do not round intermediate calculations. Enter your answer as a decimal rounded to 4 decimal places, e.g., 0.1617.

Debt to Assets

Equity to Assets

Next, calculate the cost of equity and cost of debt to get the WACC.

Leave the cost of debt as an APR. Do not round intermediate calculations (i.e. use more than four decimal places when using the capital structure weights above). Enter the following answers as a percent rounded to 2 decimal places, e.g., 32.16.

Cost of Equity

%

After-tax Cost of Debt

%

WACC

%