Keep at least five decimal places in all your intermediate calculations. Round your final answer to at least three decimal places.
Proplan shares are currently selling at $69.25 each. The yield on Proplan debt is 4% and the firm’s beta is 0.70. The T-bill rate is 4% and the expected return on the market portfolio is 9%. Proplan pays a combines federal and state tax rate of 35%. The company’s target capital structure is 25% debt and 75% common equity. Proplan’s cost of debt is 2.6% and the company’s cost of equity is 7.5%. What is the WACC for Proplan?