Ramblin Wreck is a firm specializing in engineering components. The firm is publicly traded and...
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Ramblin Wreck is a firm specializing in engineering components. The firm is publicly traded and is considering the following project: The project will last 5.00 years with an annual cash flow of $40.00 million. The project will require an initial investment of $140.00 million The firm must determine the cost of capital to evaluate the project. (The project is within the firm's normal activities) Ramblin Wreck, Inc. Financial Data: STOCK DATA: BOND DATA: Current Price Per Share $28.00 Current Price Per Bond $933.00 # of Shares 20,000.00 2.00 million # of bonds $50 million Annual Coupon Rate Book Value 8.00% Face Value Per Bond $1,000 Maturity 10 years The risk free rate in the economy is currently 2.00%, while investors have a market risk premium of 8.00%. Ramblin Wreck, Inc. has a beta of 1.41. The tax rate is 37.00%. What is the WACC for the project? Submit Answer format: Percentage Round to: 2 decimal places (Example: 9.24%, % sign required. Will accept decimal format rounded to 4 decimal places (ex: 0.0924))
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