Question: table [ [ table [ [ Assets ( in Millions ) ] , [ Current ] ] , $ 4 0 , Liabilities
tabletableAssets in MillionsCurrent$Liabilities & EquityNet Fixed,$Bonds $ ParPreferred Stock $ ParTotal$tableCommon Stock $ parTotal$
The company has some bonds outstanding with coupon rate of and semiannual payments; the bonds currently sell for $ The maturity of those bonds is years.
The company's applicable tax rate is
The preferred stocks pay quarterly dividend of $ and their market price is $
The dividends of the common stocks of this company have been growing steadily at per year, and this growth rate is expected to continue in the future. Last year's dividend was $
The floatation cost for new common stocks is The floatation cost on preferred stock is
The market value of the common stock is $
Assume the company is going to issue new preferred stocks and new common stocks.
a What are the book weights of this company's capital structure?
b What are the market weights of this company's capital structure?
c What is the cost of debt?
d What is the cost of new preferred stock?
e What is the cost of new common stock?
f What is the WACC using the market weights?
g What is the WACC using the book weights?
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