Calculate firm target weighted average cost of capital

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Using the information below, calculate the firm's Target Weighted Average Cost of Capital (WACC). Target Capital Structure is 30% Debt and 70% Equity 30-year government bond rate trading in the market is 2.5%. Market Value of Debt is $330 million (175 basis point spread above comparable treasuries)

Company had ten million shares outstanding trading at $70 per share

Market Risk Premium is 6%

Corporate tax rate of 25%

Asset Beta is 0.9

Cash on balance sheet of $30,000,000

Reference no: EM133123804

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