Question: MABK Sdn Bhd has a target capital structure that consists of 60% common equity and 40% debt. In order to calculate MABK weighted average cost

MABK Sdn Bhd has a target capital structure that consists of 60% common equity and 40% debt. In order to calculate MABK weighted average cost of capital, an analyst has accumulated the following information: The companys bond will mature in 12 years; carry a coupon rate of 7.5% with interest to be paid semi-annually. The bonds have a face value of $1,000 and selling for $1,010.00 per unit. The company uses the CAPM to calculate the cost of common stock. The risk-free rate is 5% and market risk premium is 6%. The beta on common stock is 1.15. The companys retained earnings are sufficient so that they do not have to issue any new common stock to fund capital projects. The companys tax rate is 30%. Given this information

what is MABK weighted average cost of capital?

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