XYZ Industries Has 10 Million Shares of Stock Outstanding Selling

Multiple Choice

XYZ Industries has 10 million shares of stock outstanding selling at $10 per share and an issue of $30 million in 8.5 percent, annual coupon bonds with a maturity of 25 years, selling at 102 percent of par ($1000) . If XYZ's weighted average tax rate is 40 percent and its cost of equity is 15 percent, what is XYZ's WACC?

A) 8.06%
B) 11.75%
C) 12.65%
D) 13.43%