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Please see below for Two-Two Corporation's information. Debt: 9,700 7.2 percent coupon bonds outstanding, with 23 years to maturity and a quoted price of 105.75.

Please see below for Two-Two Corporation's information.

  • Debt: 9,700 7.2 percent coupon bonds outstanding, with 23 years to maturity and a quoted price of 105.75. These bonds have a par value of $1,000 and pay interest semiannually.
  • Common stock: 260,000 shares of common stock selling for $65.20 per share. The stock has a beta of .97 and will pay a dividend of $3.40 next year. The dividend is expected to grow by 5.2 percent per year indefinitely.
  • Preferred stock: 8,700 shares of 4.60 percent preferred stock selling at $94.70 per share.
  • Market: 11.3 percent expected return, a risk-free rate of 3.95 percent, and a 22 percent tax rate.

What is the company's WACC?

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