Hawkeye medical services has 5000 bonds outstanding with an


Hawkeye Medical Services has 5,000 bonds outstanding with an 8% annual coupon rate, 12 years to maturity, a $1,000 face value, and a $950 market price. The company's 40,000 shares of preferred stock pay a $2 annual dividend, and sell for $25 per share. The company's 200,000 shares of common stock sell for $12 per share and have a beta of 2.0. The risk free rate is 5%, and the market return is 15%. Assuming a 40% tax rate, what is the company's WACC?

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Finance Basics: Hawkeye medical services has 5000 bonds outstanding with an
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