Assume that you are on the financial staff of vinson


Assume that you are on the financial staff of Vinson Enterprises, and you have collected the following data: The yield to maturity on the company's outstanding 6.5% annual coupon bonds is 5.5%, and its tax rate is 35%. The risk-free rate is 2.5%, the market risk premium (rM = IRF) is 5.75%, and the firm's beta is 0.85. The firm's capital structure consists of 40% debt and 60% equity. What is Vinson's WACC?

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Financial Management: Assume that you are on the financial staff of vinson
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