Eastern Digital has 300,000 shares outstanding which sell for $10 per share. The extra risk associated with this stock suggests that the investor should get a return 5% greater than that being paid on its bonds. The company has 10,000 10‐year bonds outstanding. 

The bonds have a coupon rate of 8% (coupons paid semiannually), a face value of $1,000 and currently sell for $1,100. The marginal tax rate for this company is 30%. 

What is this company's WACC?

Answer rating: 100% (QA)

To calculate the Weighted Average Cost of Capital WACC we need to calculate the cost of equity and the cost of debt and then weight them according to ... View the full answer