Assume that you are on the financial staff of Tufte Enterprises, and you have collected the following data:  (1) The yield to maturity on the company's outstanding 8% annual coupon bonds is 6%, and its tax rate is 25%.  (2) The risk-free rate is 3.5%, the market risk premium (r_M - r_RF) is 5.5%, and the firm's beta is 0.70.  (3) The firm's capital structure consists of 40% debt and 60% equity.  What is Tufte's WACC?

Answer rating: 100% (QA)

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