Given the following information for Firestone Company, find the WACC. Assume the company s tax rate is 25 percent. Debt: 25,000 bonds outstanding, 5 percent coupon, $1,000 par value, 10 years to maturity, selling for 102 percent of par; the bonds make semiannual coupon payments. Common stock: 300,000 shares outstanding, selling for $28 per share; the beta is 1.50. Market: 7 percent market risk premium and 3.0 percent risk-free rate.

6.49%

5.36%

6.02%

6.85%

7.16%