JLP Industries Has 6

question 82

Multiple Choice

JLP Industries has 6.5 million shares of common stock outstanding with a market price of $20.00 per share. The company also has outstanding preferred stock with a market value of $10 million, and 25,000 bonds outstanding, each with face value $1,000 and selling at 90% of par value. The cost of equity is 14%, the cost of preferred is 10%, and the cost of debt is 6.25%. If JLP's tax rate is 34%, what is the WACC?

• A) 12.39%
• B) 12.98%
• C) 13.13%
• D) 13.72%

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Definitions:

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