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What is the weighted cost of capital

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A capital structure of 40% debt and 60% equity. considering a project that requires an investment of $2.6 million. To finance this project, plans to issue 10-year bonds with a coupon interest rate of 12%. Each of these bonds has a $1,000 face value and will be sold to net $980. If the current risk-free rate is 7% and the expected market return is 14.5%, what is the weighted cost of capital? Assume the company has a beta of 1.20 and a marginal tax rate of 40%.

Reference no: EM131557175

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