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question micro spinoffs inc issued 10 yeardebt a year ago at par value with a coupon 4293586

Question

Micro Spinoffs, Inc., issued 10-yeardebt a year ago at par value with a coupon rate of 6%, paidannually. Today, the debt is selling at $1,080. The firm?s taxbracket is 35%.

 

Micro Spinoffs also has preferredstock outstanding. The stock pays a dividend of $8 per share, andthe stock sells for $50.

 

Micro Spinoffs?s cost of equity is18%. What is its WACC if equity is 60%, preferred stock is 10%, anddebt is 30% of total capital? (Do not round intermediatecalculations. Round your answer to 2 decimal places.)

 

  WACC

%

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