Question
The current stock price for a company is $45 per share, and there are 9 million shares outstanding. The beta for this firms stock is
The current stock price for a company is $45 per share, and there are 9 million shares outstanding. The beta for this firms stock is 0.9, the risk-free rate is 4.4, and the expected market risk premium is 6.1%. This firm also has 150,000 bonds outstanding, which pay interest semiannually. These bonds have a coupon interest rate of 6%, 10 years to maturity, a face value of $1,000, and a current price of 1,115.44. If the corporate tax rate is 30%, 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).
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