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What is the weighted average cost of capital

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Reference no: EM131970804

Zeolok Corp. has a target capital structure consisting of 40% debt and 60% equity. Zeolok has 6% coupon bonds outstanding that mature 20 years from now and currently sell at par value. Zeolok common stock has a beta of 1.25. Assume the risk-free rate is 3% and the market risk premium is 7%. Zeolok has a marginal tax rate of 40%. What is the weighted average cost of capital, WACC, for Zeolok?

Reference no: EM131970804

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