15. You are asked to calculate the weighted average cost of capital for your company....
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15. You are asked to calculate the weighted average cost of capital for your company. Your company has no preferred stock. The market value of your firm's stock is $65 million. The market value of your firm's debt is $35 million. The average coupon rate on your outstanding debt is 7%. The average yield to maturity on that same debt is 6%. Your company's marginal tax rate is 35%. You estimate an appropriate risk-free rate is 3%. Your firm's beta is 1.1. You estimate an appropriate equity risk premium is 5.5%. What is your firm's WACC?
A. 5.4%
B. 6.62%
C. 7.25%
D. 7.48%
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