Your firm issued 30 year bonds to to raise capitalt, the bonds sold at par and...

  

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Your firm issued 30 year bonds to to raise capitalt, the bonds sold at par and have an annual coupon of 7.5%. Your annual tax rate is 28%. You also have $1 Million in preferred stock outstanding at it has a face value of $100, a perpetual dividend of 6%, and sells at 107.91. Your stock price is $50 and is in perpetual growth at a rate of 6%; your next dividend (D1) is scheduled to be $3.38 Your target capital structure is 30% Bonds, 10% Preferred Shares and 60% Common Equity. What is your Weighted Average Cost fo Capital (WACC)? Answer as a percentage to two decimal places; do not enter the % symbol Your firm issued 30 year bonds to to raise capitalt, the bonds sold at par and have an annual coupon of 7.5%. Your annual tax rate is 28%. You also have $1 Million in preferred stock outstanding at it has a face value of $100, a perpetual dividend of 6%, and sells at 107.91. Your stock price is $50 and is in perpetual growth at a rate of 6%; your next dividend (D1) is scheduled to be $3.38 Your target capital structure is 30% Bonds, 10% Preferred Shares and 60% Common Equity. What is your Weighted Average Cost fo Capital (WACC)? Answer as a percentage to two decimal places; do not enter the % symbol

Answer rating: 100% (QA)

To calculate the Weighted Average Cost of Capital WACC we need to determine the cost of each compone... View the full answer