Consider company XYZ that is getting 85% of its funding through bonds and the rest through shares. Its marginal tax rate is equal to 7%. The yield to maturity on its bonds is 5% and the required rate of return on shares is equal to 8%. Calculate the WACC. (write your answer in decimal points, at least three digits after the decimal place) Answer: Give your reasons 1 A B 1 Ff E E E 8 Bo © ?? Whitewater has a beta of 0.9. The risk-free rate is equal to 3% and the market risk premium is equal to 6%. Whitewater needs a total funding of $300,000 to complete a project. $100,000 are obtained through debt and the rest from shares. The marginal tax rate is equal to 18.3% and the yield to maturity on Whitewater’s bonds is equal to 7%. Calculate the WACC. Use four decimal points Show steps in the reasons box. Answer:
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