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

Suppose the most recent annual dividend was $5.90 and the annual dividend growth rate is 7 percent. The tax rate is 35 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

%