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  3. 7. capital investments corporations debt has a mar

7. Capital Investments Corporations debt has a market value of $40 million and stock has...

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Accounting

7. Capital Investments Corporations debt has a market value of $40 million and stock has a market value of $60 million (=3 million outstanding shares @ $20 each). The firm pay s 10% rate of interest on new debt and has a beta () of 1.41. The corporate tax rate is 34% and the Security Market Line (SML) applies. Currently the market risk premium is 4.68% and Treasury Bill rate is 5.49%. What is the corporations WACC?

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