Mars Inc. Target Capital structure is 40 % debt and 60% Equity. If the cost debt is 9% pa before tax and the tax rate is 40%. The CEO has calculated the WACC to be 9.96%. 

What is the cost of Equity?

 

Tunney Industries is in the process of Issuing preferred stock at a price of 50/ each. The stock will pay a dividend of 3.80 per share. The floatation costs on the issue is estimated to be 5% of the price. 

What is the  cost of Preferred stock?

Answer rating: 100% (QA)

To calculate the cost of equity we can use the WACC formula WACC EV Re DV Rd 1 T Where E market valu... View the full answer