What is the maximum rate that they can pay for the money


Eaton Corporation has established its capital budget at $35,000,000 for 2017 to complete 22 projects In the coming year. They can obtain 2/3's of the capital by selling company stock (equity). Eaton's stock has a Market Premium o1 6.5% and the Riskless investment rate Is set at 3.2%. They have a Beta of 2.12 and an effective tax rate of 42%. If they desire to have a WACC of no more than 13%, what Is the maximum rate that they can pay for the money (debt) they will need to borrow?

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Financial Management: What is the maximum rate that they can pay for the money
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