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What will nantucket new wacc be

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The Nantucket Nugget is unlevered and is valued at $1,000,000. Nantucket is currently deciding whether including debt in their capital structure would increase their value. The current of cost of equity is 12%. Under consideration is issuing $500,000 in new debt with an 8% interest rate. Nantucket would repurchase $500,000 of stock with the proceeds of the debt issue. There are currently 32,000 shares outstanding and their effective marginal tax bracket is 34%. What will Nantucket's new WACC be?

Reference no: EM132557256

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