A company's capital structure is comprised of 60% equity and 40% debt.The company's tax rate is 30%.The company's bonds have a coupon rate of 6% and mature in seven years.Currently, these bonds are trading in the open market to yield 6.7%.Government bonds are currently yielding 4.5%.The company's stock has a Beta of 1.3.Stock market expected returns is estimated to be 9%, while the market risk premium is expected to be 4.5%.Given the above information, calculate the company's WACC.
Correct Answer:
Verified
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