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QUESTION 1 Nacco Company has the following information. Debt: 20,000 bonds outstanding, 5 percent coupon, $1,000 par value, 10 years to maturity, selling for 98
QUESTION 1
- Nacco Company has the following information. Debt: 20,000 bonds outstanding, 5 percent coupon, $1,000 par value, 10 years to maturity, selling for 98 percent of par; the bonds make semiannual coupon payments. Common stock: 250,000 shares outstanding, selling for $40 per share; the beta is 1.70. The company's tax rate is 25 percent. The market risk premium is 7.0 percent and the risk-free rate is 3.0 percent. Find the company's WACC:
- 7.65%
- 7.41%
- 7.88%
- 8.13%
- 7.20%
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