CAPM CASE $24$ POINTS. SHOW YOUR WORK AND CALCUALTIONS

$1$

You are analyzing a Ranger Corporation's capital structure. It has the following issues of capital.

The company can NOT use the tax shelter. Determine the WACC and its parts.

Common Stock:

$45$ million shares of Class A trading at $$58$ with a Beta of $1\mathrm{.}2$

The current risk$-$free rate is $3\mathrm{.}8\%$

The current market return on similar stocks is $12\mathrm{.}8\%$

Preferred Stock:

$15$ million shares trading at $$79$

$$100$ face value

Dividend rate of $7\%$

Bonds:

$50,000$ series $2053\text{'}$s $-30$ years trading at $98\mathrm{.}5$$$1000$ face $8\%$ coupon $-$ annual

$200,000$ series $2045\text{'}$s $-22$ years trading at $102\mathrm{.}5$$$2000$ face $5\%$ coupon $-$ annual

What is the cost of Equity?

What is the cost of Preferred?

What is the cost of Debt?

What is the weight $\%$ of Equity?

What is the weight $\%$ of Preferred?

What is the weight $\%$ of Debt?

What is the WACC?