Karriem Enterprises has common stock (65%), preferred stock (20%), and debt (15%) in its capital structure. The YTM on Karriem's debt is 5.9% and its preferred shares sell for $21 with a $2 annual dividend. The company's common stock is priced at $39/share, will pay a $6 dividend next year, and that dividend will grow at 4% forever. The tax rate is 30%. 

What is Karriem's WACC?

Answer rating: 100% (QA)

To calculate the Weighted Average Cost of Capital WACC we need to first calculate the cost of each c... View the full answer