Dinklage Corp. has 9 million shares of common stock outstanding. The current share price is $81, and the book value per share is $8.

The company also has two bond issues outstanding. The first bond issue has a face value of $80 million, a yield to maturity of 10.45 percent, and sells for 96 percent of par. The second issue has a face value of $50 million, a yield to maturity of 10.26 percent, and sells for 104 percent of par. The first issue matures in 25 years, the second in 8 years.

Suppose the most recent dividend was $5.30 and the dividend growth rate is 5 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 1,00,000)

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

%