What is WACC

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Question - The firm has $50 million debt, $50 million preference shares and 100 million shareholders funds in its balance sheet. Its debt comprises a 6% semi-annual coupon bond maturing in 20 years time. The bond is currently traded at $945. The firm's 5% preference shares, which were issued at $100, are currently traded at $75. Its outstanding 3.5 million shares currently sell for $20 per share and pay dividends of $1.2 the firm is regarded as a mature stock whose beta is 0.92 the current risk free rate is 4% while the long-term market return is 10%. The corporate tax rate is 22%. What is WACC?

Reference no: EM132752414

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