A company has $89 million in outstanding bonds, and 10 million shares of stock currently trading at $34 per share.The bonds pay an annual coupon rate of 8% and is trading at par. The company's beta is 1.2, its tax rate is 40%, the risk-free rate is 2%, and the market risk premium is 5%. What is this firm's WACC?

Answer rating: 100% (QA)

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