QUESTION 18

Consider a hypothetical company X. Below are its relevant information. After that, you will be asked to calculate its firm specific WACC.

shares outstanding	3 million
current stock price	$35
Market value of debt	80 million
preferred stock	0 million
equity beta	0.8
US treasury yield	5%
market risk premium	4%
current yield of corporate bond	6%
tax rate	30%

what is the WACC for company X?

(keep the result in decimal form, not percentage form)