Question: ABC, Inc. is looking at raising additional capital for a future project. For ABC, Inc. to determine whether this project is worth investing in, it

ABC, Inc. is looking at raising additional capital for a future project. For ABC, Inc. to determine whether this project is worth investing in, it must first determine the cost of the capital it will use to finance the project.

(Input all answers as values with no commas, with no symbols ex. no $ or %. Input all % answers as whole numbers without symbols ex. 10.03 for .1003. Input all final answers two decimal places out.)

Hint: The cost and weight of each capital component is a weight. Please input the final answers as whole numbers without the % symbol (ex. .0987 to 9.87).

A. The firms current stock price is $45 and it has 4 million shares of stock outstanding. The firm also has $30 million of preferred stock and $70 million of debt. Calculate the weight of debt.

B. The firm is looking at issuing a new 30-year bond that pays an annual coupon of 8%. The bond is expected to sell at $980. The firm's tax rate is 40%. What is the after-tax cost of debt?

C. The firm just paid out a dividend of $4.22 on common stock with an expected growth rate of 4.5%. Calculate the cost of common equity.

D. The firm expects its preferred stocks to sell for $112.55. The firm pays a $12 annual dividend on its preferred stock. Calculate the cost of preferred stock.

E. What is the firms WACC?

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