Question: Corp has $ 1 2 0 , 0 0 0 , 0 0 0 bonds outstanding that are selling at par. Bonds with similar characteristics

Corp has $120,000,000 bonds outstanding that are selling at par. Bonds with similar characteristics are yielding 10.0 percent. The company also has 2,000,000 shares of preferred stock which pays dividend of $9 every year and 3,000,000 shares of common stock outstanding. The preferred stock sells for $60 a share. The common stock has a beta of 1.5 and sells for $50 a share. The risk-free rate is 2.2 percent and the return on the market is 11.2 percent. The corporate tax rate is 40 percent. What is the firm's weighted average cost of capital? (solve with excel)

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