The yield to maturity on the bonds is 5 and the firms tax


The total book value of WTC's equity is $14 million, and book value per share is $28. The stock has a market-to-book ratio of 1.5, and the cost of equity is 9%. The firm's bonds have a face value of $10 million and sell at a price of 110% of face value.

The yield to maturity on the bonds is 5%, and the firm's tax rate is 40%. What is the company's WACC?

(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) WACC %

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Financial Management: The yield to maturity on the bonds is 5 and the firms tax
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