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RON Ltd has the following capital structure components: Five million shares issued with a current market...

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Finance

RON Ltd has the following capital structure components:

  • Five million shares issued with a current market price of 7.Equity holders require a 9% return.
  • $10 million face value of Corporate bonds outstanding. Thesebonds pay an annual coupon of 6% and currently trade at a yield tomaturity of 6%.

If the firm faces a corporate tax rate of 30%, compute RON Ltd'sWeighted Average Cost of Capital (WACC). Enter your answer indecimal form to FOUR decimal places. For example 10.34%,would be entered as 0.1034

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RON Ltd has the following capital structure components:Five million shares issued with a current market price of 7.Equity holders require a 9% return.$10 million face value of Corporate bonds outstanding. Thesebonds pay an annual coupon of 6% and currently trade at a yield tomaturity of 6%.If the firm faces a corporate tax rate of 30%, compute RON Ltd'sWeighted Average Cost of Capital (WACC). Enter your answer indecimal form to FOUR decimal places. For example 10.34%,would be entered as 0.1034

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