Question 40

The current stock price for a company is $34 per share, and there are 8 million shares outstanding. The beta for this firms stock is 1.2, the risk-free rate is 4.3, and the expected market risk premium is 5.8%. This firm also has 130,000 bonds outstanding, which pay interest semiannually. These bonds have a coupon interest rate of 9%, 15 years to maturity, a face value of $1,000, and a current price of 981.47. If the corporate tax rate is 31%, what is the Weighted Average Cost of Capital (WACC) for this firm? (Answer to the nearest hundredth of a percent, but do not use a percent sign).