Question
Yellybean Jellybeans's capital structure includes two issued bonds and common stock equity. One bond has 22,844 issued with a current price of $845.70. The bond
Yellybean Jellybeans's capital structure includes two issued bonds and common stock equity. One bond has 22,844 issued with a current price of $845.70. The bond is a 5.5% coupon bond with 16.5 years to maturity. The second bond is a zero coupon bond with six years to maturity. The second bond compounds semiannually, is priced at $790.10, and has 8,680 bonds issued. The common stock has 1,696,220 shares outstanding that currently trade at $37.28 per share. The stock beta is 1.2 with a market return of 12.68%. If the tax rate is 21% and the US T-bill currently returns 3.3%, what is the company's weighted average cost of capital (WACC)?
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