Calculating WACC
Here is some information about Stokenchurch Inc.: Beta of common stock = 1.2
Treasury bill rate = 4%
Market risk premium = 7.5%
Yield to maturity on long-term debt = 6% Book value of equity = $440 million Market value of equity = $880 million Long-term debt outstanding = $880 million Corporate tax rate = 35%
Required:
Question: What is the company's WACC?