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A company has a capital structure that consists of $20 million of debt and $20...

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Finance

A company has a capital structure that consists of $20 million of debt and $20 million of common equity, based upon current market values. The companys yield to maturity on its bonds is 8%, and the current stock price is $35, the last dividend paid was $1.10 and the dividends are expected to grow at constant rate of 5% for long time. If the tax rate is 40%, what is this company's WACC assuming that there wont be any new equity issuance?

6.55%

10.73%

8.51%

7.13%

9.34%

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