Cowbell corp is a manufacturer of musical instruments there


Cowbell Corp. is a manufacturer of musical instruments. There are 53 million shares, each selling at $80 / share with an equity beta of 1.02. The risk-free rate is 5% and the market risk premium is 9%. There is $1.18 billion in outstanding debt (face value), paying a 9% s/a coupon for 15 years, which is currently quoted at 110% of par. Assuming a 40% tax rate, what is Cowbell Corp.’s WACC?

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Financial Management: Cowbell corp is a manufacturer of musical instruments there
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