Grey Company reported the

Grey Company reported the

Grey Company reported the following information for 2013 (numbers in millions and are book values): Total Debt $45 Total Equity $90The company has 8 million shares of common equity which has a current market price of $7.50 per share. Grey’s bonds are trading at a 20% discount to book value and have a YTM of 12% with a coupon yield of 10%. If current stockholders require a 17% return and you assume a tax rate of 30%, what is the weighted average cost of capital?

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