Problem 18-6 WACC The table below shows a book balance sheet for the Wishing Well Motel...

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Problem 18-6 WACC The table below shows a book balance sheet for the Wishing Well Motel chain. The company's long-term debt is secured by its real estate assets, but it also uses short-term bank loans as a permanent source of financing. It pays 10% interest on the bank debt and 9% interest on the secured debt. Wishing Well has 10 million shares of stock outstanding, trading at $90 per share. The expected return on Wishing Well's common stock is 18%. (Table figures in $ millions.) Cash and marketable securities Accounts receivable Inventory Current assets Real estate Other assets Total $ 100 200 50 Bank loan $ 280 Accounts payable Current liabilities 120 $ 400 $ 350 2,100 150 $ 2,600 Long-term debt Equity Total 1,800 400 $ 2,600 Calculate Wishing Well's WACC. Assume that the book and market values of Wishing Well's debt are the same. The marginal tax rate is 21%. Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place. Weighted-average cost of capital _ % Problem 18-6 WACC The table below shows a book balance sheet for the Wishing Well Motel chain. The company's long-term debt is secured by its real estate assets, but it also uses short-term bank loans as a permanent source of financing. It pays 10% interest on the bank debt and 9% interest on the secured debt. Wishing Well has 10 million shares of stock outstanding, trading at $90 per share. The expected return on Wishing Well's common stock is 18%. (Table figures in $ millions.) Cash and marketable securities Accounts receivable Inventory Current assets Real estate Other assets Total $ 100 200 50 Bank loan $ 280 Accounts payable Current liabilities 120 $ 400 $ 350 2,100 150 $ 2,600 Long-term debt Equity Total 1,800 400 $ 2,600 Calculate Wishing Well's WACC. Assume that the book and market values of Wishing Well's debt are the same. The marginal tax rate is 21%. Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place. Weighted-average cost of capital _ %