Question: Problem Solving: Given the following information, what is the WACC? Commom Stock:Bonds: 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:Bonds: 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,

22 years to maturity,

market price = $1,101.23 per bond

Market risk Premium = 8.7 %,

risk-free rate = 5%,

marginal tax rate = 35%

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