$.$ Johnson Industries finances its projects with $40\%$ debt and $10\%$ preferred stock and $50\%$common stock.

$$ The company issues bonds at a yield of to maturity of $8\mathrm{.}4\%.$

$$ The cost of preferred stock is $9\%.$

$$ The company$$s common stock sells for $ $30$ a share

$$ The company$$s dividend is currently $ $2$ a share and is expected to grow at a constant rate of $6\%$ per year.

$$ Assume flotation costs are zero and no new stock is issued.

$$ The company$$s tax rate is $30\%.$

$Required$ 

 

Calculate the weighted average cost of capital.

Answer rating: 100% (QA)

Okay lets solve this stepbystep Debt financing 40 Bonds yield 8... View the full answer