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What is the weighted average cost of capital for disneyland

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Problem 1: Disneyland has a debt-equity ratio of 0.5 and has a tax rate of 35 percent.The pre-tax cost of debt is 10 percent. There are 100,000 shares of stock outstanding with a beta of 1.2 and a market price of $100 a share. The current market risk premium is 8.5 percent and the current risk-free rate is 3.6 percent. What is the weighted average cost of capital?

Option 1: 8.96 percent

Option 2: 9.93 percent

Option 3: 11.36 percent

Option 4: 10.96 percent

Reference no: EM132796881

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