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Given the following information, compute the companys WACC current risk-free rate = 1.5% average risk-free rate over past 50 years = 4% market risk premium

Given the following information, compute the companys WACC

  • current risk-free rate = 1.5%
  • average risk-free rate over past 50 years = 4%
  • market risk premium = 6%
  • Beta = 1.2
  • D/V = 30%
  • yield to maturity on debt = 9%
  • marginal tax rate = 34%
  • taxes paid last year = $5 million
  • earnings before tax last year = $30 millio
  • a.8.53%
  • b.10.03%
  • c.7.87% d.6.39% e.6.81%

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