Estimatin the WACC: ABC Corp has a stock market capitalization of $120 million, and $30 million in outstanding debt.
The firm's equity beta is 1.2, risk free rate is 3% and market risk premium is 4%.
The firm's outstanding debt: Face value is $1000, price of debt is $980 per bond, coupon rat eis 3% annual, and the rmaining term to maturity is 8 years.
What is ABC Corp's WACC after tax? Assume tax rate is 40%. Show work.