Question: Chuck E Meat INC. has 2 0 0 , 0 0 0 bonds outstanding. Each of these bonds has a face value of $ 1

Chuck E Meat INC. has 200,000 bonds outstanding. Each of these bonds has a face value of $1,000 and sells for 120% of its face value. The bonds cost of capital (RB) is 7 percent. The company also has 10 million shares of common stock outstanding that are sold for $24 a share. The stock has a beta of 1.1, the risk-free rate is 4 percent, and the market return is 10 percent. Chuck E Meats tax rate is 30 percent. What is Chuck E Meats weighted average cost of capital (WACC)?

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