Currently, Meyers Manufacturing Enterprises (MME) has a capital structure consisting of 35% debt and 65% equity. MME’s debt currently has a 6.9%…
Currently, Meyers Manufacturing Enterprises (MME) has a capital structure consisting of 35% debt and 65% equity. MME’s debt currently has a 6.9% yield to maturity. The risk-free rate (rRF) is 4.9%, and the market risk premium (rM – rRF) is 5.9%. Using the CAPM, MME estimates that its cost of equity is currently 12.8%. The company has a 40% tax rate.
a. What is MME’s current WACC? Round your answer to 2 decimal places. Do not round intermediate calculations.