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The management team at Bellatrix Magic Shop is trying to decide whether to invest in...

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Finance

The management team at Bellatrix Magic Shop is trying to decide whether to invest in a new line of business and wants to calculate their WACC. The company currently has a market value of equity of $43 million and $80 million of debt outstanding. The before-tax cost of debt is 5.60%. Bellatrix Magic Shops beta is 1.8, the current risk-free rate is 3%, and the expected market return is 8%. The firm will not be issuing any new stock. The current tax rate is 21%. What is its WACC?

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