Question
(a) Given the following information, calculate the weighted average cost of capital for Hamilton Corp. Percent of capital structure: Debt........................... 30% Preferred stock........... 15 Common
(a) Given the following information, calculate the weighted average cost of capital for Hamilton Corp.
Percent of capital structure:
Debt........................... 30%
Preferred stock........... 15
Common equity......... 55
Additional information:
Bond coupon rate.............................. 13%
Bond yield to maturity...................... 11%
Dividend, expected common............. $ 3.00
Dividend, preferred........................... $10.00
Price, common................................... $50.00
Price, preferred.................................. $98.00
Flotation cost, preferred.................... $ 5.50
Growth rate........................................ 8%
Corporate tax rate.............................. 30%
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