Question: Problem Solving: Given the following information, what is the WACC? Commom Stock: 1 million shares outstanding, $35 per share, $1 par value,beta = 1.3; 10,000

Problem Solving: Given the following information, what is the WACC?

Commom Stock: 1 million shares outstanding, $35 per share, $1 par value,beta = 1.3; 10,000 bonds outstanding, $1,000 face value each, 8% annual coupon, 22years to maturity, market price = $1,101.23 per bond

Market risk Premium=8.6 %, risk-free rate = 5%, marginal tax rate = 35%

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