The current stock price for a company is $39 per share, and there are 8 million shares outstanding. The beta for this firms stock is 1.3, the risk-free rate is 4.5, and the expected market risk premium is 5.9%. This firm also has 130,000 bonds outstanding, which pay interest semiannually. These bonds have a coupon interest rate of 9%, 28 years to maturity, a face value of $1,000, and a current price of 971.59. If the corporate tax rate is 38%, what is the Weighted Average Cost of Capital (WACC) for this firm? (Answer to the nearest hundredth of a percent, but do not use a percent sign).

Answer rating: 100% (QA)

To calculate the Weighted Average Cost of Capital WACC for the firm we need to consider the cost of ... View the full answer