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What is nasser weighted average cost of capital

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Reference no: EM132576561

Nasser's Construction Co. has 80,000 bonds outstanding that are selling at par value. Bonds with similar characteristics are yielding 8.5%. The company also has 4 million shares of common stock outstanding. The stock has a beta of 1.1 and sells for $40 a share. The U.S. Treasury bill is yielding 4% and the market risk premium is 8%. Nasser's tax rate is 35%. What is Nasser's weighted average cost of capital?

A. 7.10%
B. 7.39%
C. 10.38%
D. 10.65%
E. 11.37%

Reference no: EM132576561

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