Question: Question 2 (39 marks) Given the following information, compute the Weighted Average Cost of Capital (WACC) for internally generated funds: Preferred Shares Common Equity Debt
Question 2 (39 marks) Given the following information, compute the Weighted Average Cost of Capital (WACC) for internally generated funds: Preferred Shares Common Equity Debt # of Shares/Bonds Issued 16,800 104,000 2,000 FMV for One Share/Bond $ 67.00 $ 25.00 $ 940.00 Add'l Info Corporate Tax Rate Dividend, Preferred $ Dividend, Common $ Price, Preferred $ Price, Common $ Corporate Growth Rate Bond Yield (Mkt Rate) Flotation Costs, Preferred Flotation Costs, Common $ Flotation Costs, Debt 40% 7.30 1.90 (Next Dividend Payment) 67.00 25.00 5% 9% 4% 1.81 / Share 5% Question 3 (4 marks) Given the information from Question 2, compute the Weighted Average Cost of Capital (WACC) for externally generated funds
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