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You have obtained the following information for ABC. a) Firms bond mature in 20 years, have an 8% annual coupon, a par value of $1,000
You have obtained the following information for ABC. a) Firms bond mature in 20 years, have an 8% annual coupon, a par value of $1,000 and a maket price of $1050. b) the Companys tax rate is 40%. c) the risk-free rate is 4.5%, the market risk premium is 5.5% and stocks beta is 1.2 d) the Capital sturcture conistses of 35% debt and 65% equity. The firm uses the CAPM to estimate the cost of common stock. What is the WACC?
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