Question: Your company has only two capital components: Long Term Debt and Common Stock. The balance sheet shows long term debt to be $25,000,000 and Total

Your company has only two capital components: Long Term Debt and Common Stock. The balance sheet shows long term debt to be $25,000,000 and Total Common Equity to also be $25,000,000. The interest rate on your long term debt (per the loan documents is 8.00%. The most recent year's dividends totaled $5,000,000. Your tax rate is 40.00%. What is the current Weighted Average Cost of Capital?

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