What is the weighted average cost of capital for echo inc

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The current balance sheet of Echo, Inc. records that the book value of its common equity is $515,000 and book value of its long-term interest-bearing debt is $283,000. The company has no preferred stock and the only debt it has is a 2.65% coupon bond issue that matures in twelve years and that pays coupon interest once per annum. The bonds are currently trading in the marketplace at 96.03% of their face value. The company has 24,000 shares of common stock outstanding that are trading at $27.90 per share. The beta of the common stock is 0.80, the current risk-free rate is 1.80% per annum, and the market risk premium is 5.60%. The company tax rate is 21%.

Question 1: What is the company's cost of equity?

Question 2: What is the company's cost of debt?

Question 3: What is the weighted average cost of capital (WACC) for Echo, Inc.

Reference no: EM132933964

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