The answer is not 12.35%.

Problem 19-3 WACC Consider the following information for Federated Junkyards of America. Debt: $72,000,00 book value outstanding. The debt is trading at 92% of book value. The yield to maturity is 8%. Equity: 2,200,000 shares selling at $39 per share. Assume the expected rate of return on Federated's stock is 17%. Taxes: Federated's marginal tax rate is Tc = 0.21. Calculate the weighted-average cost of capital (WACC). (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Weighted-average cost of capital 12.35 %