What is the after tax weighted average cost of capital

Reference no: EM13264480

A firm is financed with the following securities.
Weight of common stock in the capital structure is 40%, beta=1.2 (risk free rate=6% and market return = 10%)
Weight of corporate bond in the capital structure is 60%, 20-year bond, face value=$1,000, market price per bond = $900, and annual coupon rate = 6%. (Assume annual coupon payment)_need to calculate YTM

Corporate tax rate is flat 40%.

What is the after tax weighted average cost of capital (WACC) of this firm?

Reference no: EM13264480

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