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When estimate step by step the Weighted Average Cost of Capital for a corporation, we know the following information about their outstanding public securities: 600

When estimate step by step the Weighted Average Cost of Capital for a corporation, we know the following information about their outstanding public securities:

  1. 600 semiannual bonds outstanding, 7 years to maturity, Coupon 8%, Face value $1000, current market Price $452
  2. 1,300 common shares trading currently at $30/share, 0.75, Risk Free 4%, Market Return 10%, Tax Rate 35%

What is the Cost of Debt?

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