The following data pertains to Michalko Corp. Assuming that the risk-free rate is 4.2% and the market risk premium is 6.2%, calculate Michalko's weighted-average cost of capital.
- Michalko Corp.
- Total Assets$14,680
- Interest-Bearing Debt$ 19,100
- Average borrowing rate for debt11%
- Common Equity:
- Book Value$ 5,120
- Market Value$25,700
- Marginal Income Tax Rate40%
- Market Equity Beta1.5