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ABC Corporation has $10M face value Coupon rate= 3.5% Annual Coupon Time to maturity = 10 years YTM = 5% Tax rate = 35% Preferred

ABC Corporation has

$10M face value

Coupon rate= 3.5%

Annual Coupon

Time to maturity = 10 years

YTM = 5%

Tax rate = 35%

Preferred Shares

1 million shares outstanding

Par value = $5 per share

8% dividend rate (annual)

Equivalent shares yield 6%

Common Shares

Shares outstanding = 5M

Market Price= $25 per share

Beta = 0.8

T-Bill rate 3%

Expected return on the market E(km)= 9%

What is Ke. Kd, Kp we and WACC? Please show all steps.

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