Anthony Lopez Electrical Co. has a debt of 20 million now selling at 95% and a YTM of 7%. The book value of 3 million shares of common stock is $10/share. In addition, the capital mix has $5 million of preferred stock. The preferred verde082 has a price of $30 /share and a dividend of $3. The common stock is trading at $25/share. The expected dividend next year is $5 and its growth rate is 5%. What is the pre-tax WACC of this company?

Answer rating: 100% (QA)

Step 1 Calculate the weights of each capital component Debt Weight Debt Price Total Capitalization W... View the full answer