Consider the following information (15 points) Book Value Unit Price of Units Coupon Rate Maturity Bonds $30 mm $980 30,000 9 10 years Debentures 50 mm 900 50,000 8 10 years Preferred Stock 20 mm 90 200,000 10 Common Stock 100 mm 40 6,000,000 Retained Earnings 100 mm Assume a tax rate of 40 The expected common stock dividend one year from now is $2 and it is expected to grow at 8 per annum Determine the ATWACOC

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Question: Consider the following information (15 points). Book Value Unit Price # of Units Coupon Rate Maturity Bonds $30 mm $980 30,000 9% 10 years Debentures

Consider the following information (15 points).

	*Book Value*	*Unit Price*	*# of Units*	*Coupon* *Rate*	*Maturity*
*Bonds*	*$30 mm*	*$980*	*30,000*	9%	*10 years*
*Debentures*	*50 mm*	*900*	*50,000*	8%	*10 years*
*Preferred Stock*	*20 mm*	90	*200,000*	*10%*	-
*Common Stock*	*100 mm*	40	*6,000,000*	-	-
*Retained Earnings*	*100 mm*	-		-	-

Assume a tax rate of 40%. The expected common stock dividend one year from now is $2 and it is expected to grow at 8% per annum. Determine the ATWACOC.

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