Billick Brothers is estimating its WACC. The company has collected the following information: · Its capital structure
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Billick Brothers is estimating its WACC. The company has collected the following information: · Its capital structure consists of 35 percent debt and 65 percent common equity. · The company has 16-year bonds outstanding with a 8.9 percent annual coupon that are trading at par. · The company’s tax rate is 31 percent. · The risk-free rate is 4.7 percent. · The market risk premium is 2.7 percent. · The stock’s beta is 1.1. What is the company’s WACC?
7.13%
6.93%
6.73%
6.53%
6.33%
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