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What is the company wacc

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Reference no: EM132953465

Smothers Brothers Ltd. is estimating its WACC. The company has collected the following information:

  • Its capital structure (in market value terms) consists of 40 percent debt (i.e. D/(E+D) = 0.4) and 60 percent common equity.
  • The company has 20-year bonds outstanding with a 9.8% annual coupon that are trading at par.
  • The company's tax rate is 33%.
  • The risk-free rate is 3.9%.
  • The market risk premium is 5%.
  • The stock's beta is 0.9.

What is the company's WACC?

Reference no: EM132953465

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