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a - A firm borrows money at 9% interest after taxes and pays 11% for equity. The company raises capital in equal proportions, i.e., 70%
a - A firm borrows money at 9% interest after taxes and pays 11% for equity. The company raises capital in equal proportions, i.e., 70% debt and 30% equity. Determine the Weighted Average Cost of Capital (WACC) of the Firm.
b - Determine the cost of common equity. The current market price of stock is SR 200, and the stock pays Expected dividend of SR8 with a growth rate of 5%.
c - Determine the cost for a preferred stock that pays annual dividend SR 6, has issue price SR 40, and incurs flotation costs of SR 3 per share.
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