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Assume that my optimal capital structure consists of 45% debt and 55% equity. I have $1,000...

  1. Assume that my optimal capital structure consists of 45% debt and 55% equity. I have $1,000 outstanding bonds. Given the following information, calculate the firm’s WACC.

rd= 8%.

EBT = $100,000.

Payout ratio = 55%.

Tax rate = 30%.

P0= $25.

Growth = 1%.

Shares outstanding = 10,000.

Flotation cost on additional equity = 15%.

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