The following data pertains to Michalko Corp. Assuming that the risk-free rate is 4.2% and the market risk premium is 6.2%, calculate Michalko's weighted-average cost of capital.
Michalko Corp.
Total Assets$14,680
Interest-Bearing Debt$ 19,100
Average borrowing rate for debt11%
Common Equity:
Book Value$ 5,120
Market Value$25,700
Marginal Income Tax Rate40%
Market Equity Beta1.5