The noncallable bonds mature in 20 years, they have a 8% annual coupon rate and a par value of $1,000 and a market price of $1,050.00.
The tax rate is 40% and the risk free rate is 4.50%, the market risk premium is 5.50%, and the stock's beta is 1.20.
The target capital structure consists of 35% debt and balance is common equity. The company uses the CAPM to estimate the cost if common stock, and will not issue new shares. What is the WACC?