Question: pleeaase helppp I need the answerr ASAP Consider the case of Kuhn Co. Kuhn Co. is considering a new project that will require an initial
Consider the case of Kuhn Co. Kuhn Co. is considering a new project that will require an initial investment of $20 million. It has a target capital structure of 45% debt, 4% preferred stock, and 51% common equity. Kuhn has noncallable bonds outstanding that mature in 15 years with a face value of $1,000, an annual coupon rate of 11%, and a market price of $1555.39. The vield on the company's current bonds is a good approwimation of the yleld on any new bonds that it. issues. The company can sell shares of preferred stock that pay an annual dividend of $9 at a price of $92.25 per share. Kuhn does not have any retained earnings available to finance this project, so the firm wil have to issue new common skock to help fund it. Its common stock is currently selling for $33.15 per share, and it is expected to par a dividend of $1.36 at the end of next year. Flotation costs will represent 8% of the funds raised by usuing new commen stock. The company is projectod to grow at a constant rate of 8.7%, and they face a tax rate of 25%. What will be the WACC for this project? (Note: Round your intermedate calculabons to two decimal places.)
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