For the Bilbo corporation below Debt 10,000, 5 coupon bonds outstanding, priced at 100 of par value $100, with 15 years to maturity These bonds pay interest annually Preferred Stock 50,000 shares of preferred stock with a dividend of $5 6 per share It is currently selling at $80 per share Common St...

To calculate the Weighted Average Cost of Capital WACC before taxes we need to determine the cost of ...

For the Bilbo corporation below: Debt: 10,000, 5% coupon bonds outstanding, priced at 100% of par value

Fantastic news! We've Found the answer you've been seeking!

For the Bilbo corporation below:

Debt: 10,000, 5% coupon bonds outstanding, priced at 100% of par value $100, with 15 years to maturity. These bonds pay interest annually.
Preferred Stock: 50,000 shares of preferred stock with a dividend of $5.6 per share. It is currently selling at $80 per share.
Common Stock: 200,000 shares common stock selling for $50 per share. The stock has a beta of 1.1
Market: The expected return on the market is 8%, and the risk-free rate of return is 3%.
Tax bracket = 20%

What is the before tax WACC of this company?