Micro spinoffs inc issued 10-year debt a year ago at par

Reference no: EM13570969

Micro Spinoffs, Inc., issued 10-year debt a year ago at par value with a coupon rate of 6%, paid annually. Today, the debt is selling at $1,080. The firm's tax bracket is 35%.

Micro Spinoffs also has preferred stock outstanding. The stock pays a dividend of $8 per share, and the stock sells for $50.

Micro Spinoffs's cost of equity is 18%. What is its WACC if equity is 60%, preferred stock is 10%, and debt is 30% of total capital? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Reference no: EM13570969

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