Jacks construction co has 100000 bonds outstanding that are, Ask an Expert

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Jack's Construction Co. has 100,000 bonds outstanding that are selling at par value. The bonds yield 9.9 percent. The company also has 4.4 million shares of common stock outstanding. The stock has a beta of 1.6 and sells for $40 a share. The U.S. Treasury bill is yielding 6 percent and the market risk premium is 9 percent. Jack's tax rate is 35 percent. What is Jack's weighted average cost of capital?

13.01 percent

18.07 percent

15.34 percent

10.68 percent

7.67 percent

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91618050

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