A ﬁrm has 2,000,000 shares of common stock outstanding with a market price of $2 per share. It has 2,000 bonds outstanding, each selling for $1,200. The bonds mature in 15 years, have a coupon
Rate of 10%, and pay coupons annually. The ﬁrm's beta is 1.2, the risk free rate is 5%, and the market
Risk premium is 7%. The tax rate is 34%. Calculate the WACC.

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The Answer of A ﬁrm has 2,000,000 shares of common stock outstanding with a market price of $2 per share. It has 2,000 bonds outstanding, each selling for $1,200. The bonds mature in 15 years, have a coupon
Rate of 10%, and pay coupons annually. The ﬁrm's beta is 1.2, the risk free rate is 5%, and the market
Risk premium is 7%. The tax rate is 34%. Calculate the WACC.

A ﬁRm Has 2,000,000 Shares of Common Stock Outstanding with a Market