A firm has 2 million shares outstanding,which are currently trading at $45 per share and have a dividend yield of 10 percent.The firm also has $40 million of 6 percent bonds outstanding that are currently trading at 110,with a yield to maturity of 3 percent.There are no preferred shares and no taxes.What is the WACC?
A) 7.70%
B) 7.85%
C) 8.69%
D) 8.77%
Correct Answer:
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