Annual coupon bonds with maturity

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Reference no: EM131326922

Johnny Cake Ltd. has 10 million shares of stock outstanding selling at $17 per share and an issue of $50 million in 8 percent annual coupon bonds with a maturity of 16 years, selling at 94.5 percent of par. Assume Johnny Cake’s weighted-average tax rate is 34 percent, its next dividend is expected to be $3 per share, and all future dividends are expected to grow at 6 percent per year, indefinitely.

What is its WACC? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

WACC %

Reference no: EM131326922

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