Problem 19-3 WACC Consider the following information for Federated Junkyards of America. • Debt: $80,000,000 book value outstanding. The debt is trading at 95% of book value. The yleld to maturity is...

Extracted text: Problem 19-3 WACC Consider the following information for Federated Junkyards of America. • Debt: $80,000,000 book value outstanding. The debt is trading at 95% of book value. The yleld to maturity is 9%. Equity. 3,000,000 shares selling at $47 per share. Assume the expected rate of return on Federated's stock is 18%. • Taxes: Federated's marginal tax rate Is Tc = 0.21. Calculate the weighted-average cost of capital (WACC). (Do not round Intermedlate calculatlons. Enter your answer as a percent rounded to 2 decimal places.) Weighted-average cost of capital 3.54 %