Big Boys Inc. has a target capital structure for 2021 of 35% debt and 65%...
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Big Boys Inc. has a target capital structure for 2021 of 35% debt and 65% equity. It has a beta of 1.2. Yield to maturity (YTM) on the companys recent debt is 8.5%. Its tax rate (federal and state) is 25%. You are given a risk-free rate of 4% and a market premium of 6%. Using the CAPM method for its cost of equity, what is its 2021 WACC?
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