Compute the wacc for quarri industries

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Question: Quarri Industries has 8 percent coupon bonds outstanding. These bonds have a market price of $954.41, pay interest semiannually, and will mature in 6 years. The tax rate is 35 percent. The common stock of Quarri Industries has a beta of 1.6 and the market risk-free rate is 4 percent and the expected return on the market is 9 percent.

In addition to common stock, Quarri has 510,000 preferred shares outstanding that pay a quarterly dividend of $0.50 per share and are currently trading for $20.00 a share. The company's outstanding bonds have a face value of $213,744,617. There are 2.04 million shares of common stock outstanding with a current market price of $98.00 per share.

Compute the WACC for Quarri Industries. (Round answer to 2 decimal places, e.g. 15.25%.)

WACC %

Reference no: EM132077498

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