Calculate the WACC of WTC

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The total book value of WTC’s equity is $40 million and book value per share outstanding is $10. The stock of WTC is currently selling for a price of $75 per share and the beta of WTC is 1.05. The bonds of WTC have a face value of $42 million and sell at a price of 110 percent of face value. The yield to maturity on the bonds is 4.5 percent and the firm’s tax rate is 35 percent. If the E(Rm) = 8% and Rf = 1%, calculate the WACC of WTC.

Reference no: EM131558796

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