Question: Given the following information calculate the weighted average cost of

Given the following information, calculate the weighted average cost of capital for Digital Processing Inc. Line up the calculations in the order shown in Table.
Percent of capital structure:
Preferred stock ............. 20%
Common equity ............ 40
Debt ................. 40
Additional information:
Corporate tax rate ........... 34%
Dividend, preferred ........... $8.50
Dividend, expected common ........ $2.50
Dividend, preferred .......... $105.00
Growth rate .............. 7%
Bond yield ............... 9.5
Flotation cost, preferred ......... $3.60
Price, common ............ $75.00


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  • CreatedOctober 14, 2014
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