Native Industries financial analysts have disclosed the following information affecting the company's capital budgeting analyses: Native Industries currently has a capital structure consisting of 75 percent common equity and 25 percent debt. Treasuries have a 5 percent yield to maturity. The market risk premium is 6 percent. The beta of the common stock is 1.2. Native has 20-year bonds with an annual coupon rate of 12 percent and a par value of $1,000. The bonds today sell for $1,200. The company's tax rate is 40 percent. Determine: the company's current WACC Answer: What impact does the present value of the bond have on the average cost of the capital