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Johnny Cake Ltd. has 8 million shares of stock outstanding selling at $20 per share and an issue of $40 million in 8 percent annual coupon bonds with a maturity of 16 years, selling at 90.5 percent of par. Assume Johnny Cake’s weighted-average tax rate is 34 percent, its next dividend is expected to be $3 per share, and all future dividends are expected to grow at 4 percent per year, indefinitely.

What is its WACC? (Do not round intermediate calculations and round your final answer to 2 decimal places.)

WACC %

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91601129

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