Question: derailed solution please Problem 9: Find the WACC for a firm with D/E-0.25 if its after-tax cost of debt is 6% and its cost of
derailed solution please

Problem 9: Find the WACC for a firm with D/E-0.25 if its after-tax cost of debt is 6% and its cost of equity is 14% Consider a firm that has: 1,000,000 common shares 200,000 preferred shares with market share price of $90 and annual coupon of S7.50 30,000 bonds maturing 10 years from now with 7% coupon rate, $1000 face value and YTM-5% Has a corporate tax rate of T-30% Is expected to pay $4.50 dividends per common share next year and dividends are expected to grow at a constant rate of 3% per year forever The required return on equity is 15% The flotation costs of issuing new common equity is F-10%
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