You have the following information about your company’s financing sources: 1...
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You have the following information about your company’s financing sources:
1) Equity Information
•
•
•
•
•
2) Debt Information
• Face value per bond = $1,000
• 500,000 bonds outstanding
• Current bond price = $1,200
• Coupon rate = 5% p.a., semiannual coupons
• 10 years to maturity
• Tax rate = 40%
What is the weighted average cost of capital for your company?
Give the answer in percentage, rounding to the nearest unit, with no decimal places (e.g., if the answer would be 3.234%, give 3; or if the answer
would be 4.562%, give 5).
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