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What is its wacc

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Question: Loran Chalices Inc. hired you as a consultant to estimate the company's WACC. You have obtained the following information.

(1) The company's noncallable bonds mature in 20 years, have a coupon rate of 7.00% paid annually, a par value of $1,000, and a current market price of $875.

(2) The company's tax rate is 25%.

(3) The required rate of return on the company's common stock based on CAPM is 10.3%.

(4) The target capital structure consists of 45% debt, with the remainder comprised of common equity. What is its WACC?

Reference no: EM132760312

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