The Johnsons Group, a leading producer of custom automobile accessories, has hired you to estimate the firm's weighted average cost of capital. The balance sheet and some other information are provided below. Assets Current assets Net plant, property, and equipment Total assets $ 38,000,000 101,000,000 $139,000,000 Liabilities and Equity Accounts payable Accruals Current liabilities Long-term debt (40,000 bonds, $1,000 par value) Total liabilities Common stock (10,000,000 shares) Retained earnings Total shareholders' equity Total liabilities and shareholders' equity $ 10,000,000 9,000,000 $ 19,000,000 40,000,000 $ 59,000,000 30,000,000 50,000,000 80,000,000 $139,000,000 The stock is currently selling for $16.25 per share, and its noncallable $1,000 par value, 20-year, 7.25% bonds with semiannual payments are selling for $875.00. The beta is 1.25, the yield on a 6-month Treasury bill is 3.50%, and the yield on a 20-year Treasury bond is 5.50%. The required return on the stock market is 11.50%, but the market has had an average annual return of 14.50% during the past 5 years. The firm's tax rate is 40%. 35 12. Refer to the data for the Johnsons Group. Which of the following is the best estimate for the weight of debt for use in calculating the firm's WACC? (Hint: market value weight) a. 18.67% 6.77.72% c. 16.58% d. 15.61% PV = 875 FV-1000 e. 22.69% ea reight 1.17728228 W-40 PMT=1kk0550)/2=27.5 T-1112= .0228 W 40 PM=11kk o550512=2 13. Refer to the data for the Johnsons Group. What is the best estimate of the firm's WACC? a. 11.85% b. 11.19% c. 11.53% d. 11.61% e. 12.14%