Determining the company wacc

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A company has the following information: (1) before-tax cost of long-term debt is 9%, (2) the company's tax rate is 30%, (3) the riskfree rate is 4%, (4) the market risk premium is 5%, and the stock's beta is 1.1. The target capital structure consists of 20% debt and the balance is common equity. The company uses CAPM to estimate the cost of common stock, and does not expect to issue any new shares. What is the company's WACC?

Reference no: EM132711635

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