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Using the information from the table, and assuming that the risk-free rate is 4.5% and the...

Using the information from the table, and assuming that the risk-free rate is 4.5% and the market risk premium is 6.2%, calculate Xena’s weighted-average cost of capital:

Xena Corp.
Total Assets $23,610
Interest-Bearing Debt (market value) $11,070
Average borrowing rate for debt 10.2%
Common Equity:
Book Value $6,150
Market Value $25,830
Marginal Income Tax Rate 37%
Market Beta 1.73

A. 12.6%

B. 13.8%

C. 11.7%

D. 9.0%
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