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Cinco De Mayo has a target debt-equity ratio of 0.58. (Hint: if you're not sure what...

Cinco De Mayo has a target debt-equity ratio of 0.58. (Hint: if you're not sure what to do about "debt-equity ratio", watch my YouTube video on that topic, which you can also find in this week's folder on Blackboard!) The yield to maturity on its bonds is 8 percent. Its cost of equity is 21 percent. The corporate income tax rate is 32 percent. Calculate the WACC for this company.

Multiple Choice

  • 16.05%

  • 15.29%

  • 11.15%

  • 11.98%

  • 14.52%

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