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FIN460 Inc.s before-tax cost of debt is 6%, and the tax rate is 35%. The...

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Finance

FIN460 Inc.s before-tax cost of debt is 6%, and the tax rate is 35%. The target capital structure consists of 30% debt and 70% common equity. We also know that the risk-free rate is 2.75%, the market risk premium is 4.5%, and the stock's beta is 1.20. The firm uses the CAPM to estimate the cost of equity, and it does not expect to issue any new common stock. There is no preferred equity in FIN460. What is the company's WACC if all the equity used is from retained earnings?

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