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Leapinge Ltd has asked you to estimate the WACC for their company. You have collected the following information: The return on risk-free Australian Government Bonds
Leapinge Ltd has asked you to estimate the WACC for their company. You have collected the following information:
- The return on risk-free Australian Government Bonds is 3% p.a.
- Leapinge Ltd has 183,000,000 shares outstanding and its shares are currently trading at $5.50 per share.
- The beta of Leapinge is 0.5, and the expected return on the market is 13%.
- Leapinge Ltd also has $160 million in corporate bonds. These bonds have a variable interest rate which is currently 6.3% compounded annually.
- The company faces a tax rate of 35%.
Calculate the Weighted Average Cost of capital for Leapinge Ltd. Enter your answer in a decimal format to six decimal places (0.123456 not 12.3456%)
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