ipigon Manufacturing has a cost of debt of 9 %, a cost of equity of 11%, and
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Question:
ipigon Manufacturing has a cost of debt of 9 %, a cost of equity of 11%, and a cost of preferred stock of 10%. Nipigon currently has 120,000 shares of common stock outstanding at a market price of $25 per share. There are 49,000 shares of preferred stock outstanding at a market price of $38 a share. The bond issue has a face value of $950,000 and a market quote of 106. The company’s tax rate is 40%. Required: Calculate the weighted average cost of capital for Nipigon.
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