Shares of common stock outstanding with a beta

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Reference no: EM13945138

Busters Ice Cream has 2,500 bonds outstanding that are selling for $1,020 each and yielding a pretax 7.2 percent. There 60,000 shares of common stock outstanding with a beta of 1.3 and a market price of $56 a share. The risk-free rate is 4 percent, the market risk premium is 7 percent, and the tax rate is 35 percent. What is the WACC?

A. 7.26%

B. 7.39%

C. 8.59%

D. 9.03%

E. 9.47%

Reference no: EM13945138

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