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LSUS Corporation has 8 0 , 0 0 0 bonds outstanding that are selling at par value. Bonds with similar characteristics are yielding 8 .

LSUS Corporation has 80,000 bonds outstanding that are selling at par value. Bonds with similar characteristics are yielding 8.6 percent. The company also has 4 million shares of common stock outstanding. The stock has a beta of 1.1 and sells for $40 a share. The U.S. Treasury bill is yielding 4 percent and the market risk premium is 8 percent. LSUS Corporation's tax rate is 34 percent. What is LSUS Corporation's weighted average cost of capital? Select one:
a.
11.47%
b.
10.10%
c.
10.65%
d.
10.42%

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