Problem 11-20 WACC (LG11-3)

Johnny Cake Ltd. has 8 million shares of stock outstanding selling at $21 per share and an issue of $40 million in 9 percent annual coupon bonds with a maturity of 18 years, selling at 93.5 percent of par. Assume Johnny Cakes weighted-average tax rate is 34 percent, its next dividend is expected to be $3 per share, and all future dividends are expected to grow at 6 percent per year, indefinitely.

What is its WACC? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

WACC

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