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A company raises $10 million by selling 5 million worth of bonds. (3 million worth of preffered stock, 1 million worth of new common stock,
A company raises $10 million by selling 5 million worth of bonds. (3 million worth of preffered stock, 1 million worth of new common stock, using 1million in retained earnings). The cost of selling debt (after tax) is 6%. Cost of selling preferred stock is 7%. Cost of selling new Common Stock is 8%, and Cost of Using Retained Earnings is 3%. Find the average cost of Weighted average of Capital?
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