Infomatics USA has provided the following data to its financial analysts to compute the Weighted average cost of capital

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Infomatics Usa Has Provided The Following Data To Its Financial Analysts To Compute The Weighted Average Cost Of Capital 1 (48.24 KiB) Viewed 16 times

Infomatics USA has provided the following data to its financial analysts to compute the Weighted average cost of capital for the firm. Corporate tax rate estimated to 22%. The company has 20,000 bonds outstanding, each with a face value of $1,000. The bonds are currently trading at 101% of face and pay an annual coupon of 6%. The remaining maturity on the bonds is 12 years. Common stock outstanding is 700,000 shares and the stock is trading at $50.00. The company does not pay a dividend, but the stock's beta is estimated at 1.3. The market risk premium is estimated at 8%; the risk free rate is 2%. The weight of debt in the balance sheet of Infomatics is Select of common equity is Select] %; the weight %. The pre-tax cost of debt is Select % and the cost of common equity is Select) %. The WACC for the firm is Select %.