About the weighted average cost of capital

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Go-Go Inc. is thinking about investing in a new project. The balance sheet reports that they currently have $12 million worth of long-term debt and $18 million worth of common equity. Their current cost of debt is 4%. According to Yahoo.Finance.com the current required return to Go-Go's stock is 11%, the company has 1.5 million shares of stock outstanding and the stock currently trades for $32 per share. If their average tax rate is 34% and they have no preferred stock, what Go-Go's weighted average cost of capital?

Reference no: EM131552675

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