Question
A company is operating in two areas of the economy (sectors or industries) and the divisional betas are presented below: BetaValue Division A1.95$420,000 Division B
- A company is operating in two areas of the economy (sectors or industries) and the divisional betas are presented below:
BetaValue
Division A1.95$420,000
Division B .52$780,000
Division C .98$920,000
Division D1.35$360,000
- What is the company's beta?
2.Foe Corporation's has the capital structure given below:
Debt (at market value) $8,000,000
Preferred stock (at market value)$1,000,000
Common stock (at market value)$6,000,000
Assuming the market weight are also the target weights for Foe Corp. please calculate the weights that should be used to find the weighted average cost of capital for Foe Corp.?
if the after-tax cost of debt is 8% the cost of preferred stock is 9% and the cost of common stock is 10%, what is the weighted average cost of capital?
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