FRE International has $50 million in short-term debt, $150 million in long-term debt, and 5 million shares of common stock outstanding. The YTM on its short-term debt is 5.5%, the YTM on its long-term debt is 7.25%, the risk-free rate is 4% and the expected market return is 18%. FRE's current stock price is $48, its beta is 1.4 and it is in the 28% tax bracket. What is FRE's WACC?

Answer rating: 100% (QA)

To calculate FREs weighted average cost of capital WACC we need to consider the different components ... View the full answer