1. Styx Company proposes to borrow $10 million capital to expand their operations, $4 million in bonds  and the rest in common stock. They can issue stocks for $35.00 by paying a dividend of $3.50 next year and maintain a growth rate of 8%. They can issue 20-year bonds for $828.41 paying 8% coupon, paid semi-annually. What is the weighted cost of capital assuming a tax rate of 35%.

Answer rating: 100% (QA)

To calculate the weighted average cost of capital WACC for Styx Company you need to consider the cost of debt and the cost of equity The WACC formula View the full answer