RON Ltd has the following capital structure components:

Five million shares issued with a current market price of 10. Equity holders require a 14% return.

$10 million face value of Corporate bonds outstanding. These bonds pay an annual coupon of 6% and currently trade at a yield to maturity of 6%.

If the firm faces a corporate tax rate of 30%, compute RON Ltd's Weighted Average Cost of Capital (WACC). Enter your answer in decimal form to FOUR decimal places. For example 10.34%, would be entered as 0.1034

Answer rating: 100% (QA)

RON Ltd capital structure comprises of Equity Capital 50000000 and Deb... View the full answer