Question: Hello, could you please answer the following question and show steps? Thank you Given the following information on Ke-Ma-Gen Ltd., what is its WACC? Debt:

Hello, could you please answer the following question and show steps? Thank you

Given the following information on Ke-Ma-Gen Ltd., what is its WACC?

Debt:

Number of bonds = 10,000

Par value = $1,000

Coupon rate = 9% (semi-annual coupons)

Time to maturity = 10 years

Market value = 98% of par

Common equity:

Number of shares outstanding = 1,000,000

Par value = $1

Price per share = $3.50

Dividends per share = $0.70

Preferred equity:

Number of shares outstanding = 50,000

Price per share = $20

Dividend yield = 5%

Other information:

Tax rate = 40%

Equity beta = 1.2

Market risk premium = 16%

Risk-free rate = 5%

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