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TWT&T has a market value based capital structure of 42% debt and 58% common equity...

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Finance

TWT&T has a market value based capital structure of 42% debt and 58% common equity financing. TWT&T has 30-year semi-annual coupon bonds outstanding selling at 94% of their $1000 par value with an annual coupon rate of 6.4% TWT&Ts beta is 1.30 according to ValueLine. The 10-year T-bond rate is 1.8% and investors demand an 10.2% market return. The companys marginal tax rate is 25%. What is TWT&Ts WACC based on this information?

A.

9.2%
B.

8.7%
C.

9.5%
D.

10.9%
E.

7.4%

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