A company is 39% financed by risk-free debt. The interest rate is 10%, the expected market risk premium is 8%, and the beta of the company’s common stock is 0.60.
a. What is the company cost of capital? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Cost of capital % =
b. What is the after-tax WACC, assuming that the company pays tax at a 40% rate? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
After-tax WACC %=