Expected market risk premium and risk-free rate

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Reference no: EM131087772

The current stock price for a company is $45 per share, and there are 4 million shares outstanding. The beta for this firms stock is 1.2, the risk-free rate is 4.6, and the expected market risk premium is 6%. This firm also has 230,000 bonds outstanding, which pay interest semiannually. These bonds have a coupon interest rate of 8%, 14 years to maturity, a face value of $1,000, and an annual yield to maturity of 8.9%. If the corporate tax rate is 38%, what is the Weighted Average Cost of Capital (WACC) for this firm? (Answer to the nearest hundredth of a percent, but do not uses a percent sign).

Reference no: EM131087772

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