What is the wacc for the firm

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ABC Inc. has 10 million shares of common stock outstanding. The firm also has 1,200,000 shares of 6 percent preferred stock (annual dividend=$6) and 300,000 semi-annual bonds of $1,000 face value with a coupon rate of 8 percent semiannual bonds outstanding. The bonds were issued five years ago with maturity of 30 years when they were issued. The market price of common stock is $46 per share and has a beta of 0.85, the preferred stock currently sells for $90 per share, and the bonds sell for 108 percent of par. The market risk premium is 7.5 percent and T-bills yield 4 percent. The firm pays taxes at 21 percent. What is the WACC for the firm?

Reference no: EM132502756

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