Answer:
10.79%
Explanation:
WACC = Pretax cost of debt*(1 - tax rate)*[(Number of bonds*Par value *selling price) / (Number of bonds*Par value*Selling price*Number of shares *Price per share)] + Rate of return*[(Number of shares*Price per share) / (Number of bonds*Par value*Selling price + Number of shares*Price per share)]
WACC = 0.065 *(1 - 0.29) * [(400*$1,500*98.2%) / (400*$1,500*98.2% + 15,100*$75)] + 0.14 x [(15,100*$75) / (400*$1,500*98.2% + 15,100*$ 75)]
WACC = 4.615%*[$ 589,200 / ($589,200 + $1,132,500)] + 0.14*[$1,132,500 / ($589,200 + $1,132,500)]
WACC= 4.615%*$589,200 / $1,721,700 + 0.14*$ 1,132,500/$ 1,721,700
WACC = 4.615%*0.342219899 + 14%*0.657780101
WACC = 1.579344834% + 9.208921415%
WACC = 10.79%
