A company is 38% financed by risk-free debt. The interest rate is 11%, the expected market risk premium is 9%, and the beta of the company’s common stock is 0.61.
a. What is the company cost of capital? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Cost of capital %
b. What is the after-tax WACC, assuming that the company pays tax at a 30% rate? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
After-tax WACC %