Whacko Corporation has the following book value balance sheet ($mil) for the year just ended:                                                 _______________________________                                                 Assets  1200            Debt   300                                                                   ____      __Equity 900                                                 Total    1200        Total    1200   The company faces a 40% corporate tax rate. Whacko’s debt consists of $300 million (face value) of bonds that have 25 years remaining to maturity. The bonds have a coupon rate of 3% and pay coupons once per year and yield to maturity is 6%. Whacko has 150 million shares of common stock outstanding, currently selling at a price of $11 per share. Whacko’s stock has a beta of 1.05, the current risk-free rate is 5%, and the expected risk premium on the overall market portfolio is 6%. What is Whacko’s weighted average cost of capital (WACC)?

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Fringe Benefit Tax

Fringe benefits are in addition to the compensation that companies give to their employees. It is an additional benefit above the stated salary. It helps to keep the employees of the firm motivated as sometimes the only salary is not enough to retain the quality employees of the firm. There are different types of fringe benefits. Fringe benefits are given in both private as well as public enterprises.