Type of common stocks and one type of bond outstanding

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Cooper has one type of common stocks and one type of bond outstanding. The total book value for the common stocks is $10million and the book value per share is $2million. The common stock just paid a dividend of $1million. The dividend is expected to grow at 5% for the next three years, and it will then slow down to 2% forever. The bond has a total face value of $50 million, with a coupon rate of 15% (coupon are paid semi-annually), a maturity of 8 years, and YTM of 11%. The expected market premium is 12% and the current risk rate is 3%. Cooper equity has a beta of 1.2 and the company pays a 35% tax rate. What is company's WACC?

Reference no: EM13950353

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