ACCT - Wright Express (WE) has a capital structure of 30% debt

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Wright Express (WE) has a capital structure of 30% debt and 70 %equity. WE is considering a project that requires an investment of 2.6 million. To finance this project, W#E 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 WE $980. If the current risk-free rate is 7% and the expected market return is 14.5%, what is the weighted cost of capital for WE? Assume WE has a beta of 1.20 

a-14.9
b-12.4
c-13.4
d-16.0

    • 12 years ago
    ACCT - Wright Express (WE) has a capital structure of 30% debt
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