Space Inc. has 9.5 million common shares outstanding. The company just paid out a $12.2 dividend per share. Current share price is $540 and book value per share is $650. Space Inc. has a beta of 1.13 and has paid dividends of $7.8, $9.1, $9.3 and $10 per share over the past four years. The expected market return is 13.8% and the treasury bill yield is 5.2%. Space Inc. also has a bond issue. The bond has a face value of $1.2 billion, 8% coupon, 8.7% YTM, is sold at 98.5% of the pair and has a maturity of 10 years. The tax rate is 35 percent.

What is the company's weighted average cost of capital?

Answer rating: 100% (QA)

To calculate the weighted average cost of capital WACC we need to first determine the cost of equity ... View the full answer