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Calculate the weighted average cost of capital

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Reference no: EM132705780

Leapinge Ltd has asked you to estimate the WACC for their company. You have collected the following information: 

  • The return on risk-free Australian Government Bonds is 3% p.a.
  • Leapinge Ltd has 59,000,000 shares outstanding and its shares are currently trading at $5.50 per share.
  • The beta of Leapinge is 0.6, and the expected return on the market is 13%.
  • Leapinge Ltd also has $429 million in corporate bonds. These bonds have a variable interest rate which is currently 8% compounded annually. 
  • The company faces a tax rate of 35%. 

Calculate the Weighted Average Cost of capital for Leapinge Ltd. Enter your answer in a decimal format to six decimal places (0.123456 not 12.3456%)

Reference no: EM132705780

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