Question: How do you get BV WACC and MV WACC? Given the data below: 1) Calculate the book-value weights for each source of capital. Remember, BV

How do you get BV WACC and MV WACC?

How do you get BV WACC and MV WACC? Given the data

Given the data below: 1) Calculate the book-value weights for each source of capital. Remember, BV does not consider float cost. 4 pts 2) Calculate the market-value weights for each source of capital. 4 pts 3) Calculate the costs of capital for Common Stock, Preferred Stock and Debt using both market-value and book-value? 6 pts 4) Calculate the Weighted Average Cost of Capital using both market-value and book-value weights. Remember, BV does not consider float cost. 6 pts Units Source of Capital Common Stock Preferred Stock Debt Total Book Value S 6,500,000 $ 375,000 $ 4,000,000 S 10,875,000 BV Weights BV WACC Market Value Share Market Value MV Weights MV WACC 5977% 3.45% 36.78% 100.00% 350,000 $ 7,500 $ 4,000 $ 35 S 60 $ 965 $ 12,250,000 450,000 3,860,000 16,560,000 73.970 272% 23.31% 100.00% Additional Bond Data Additional Preferred Data 35% 8% 1,000 Additional Common Data Dividend0 S Growth Rate 1.43 5% Tax Rate Coupon Rate Face Value Maturity Float Cost Dividend 5.00 1.00% Float Cost 200%, Float Cost 5.00%

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!