Question
Anthony Lopez Electrical Co. has a debt of 20 million now selling at 95% and a YTM of 7%. The book value of 3 million
Anthony Lopez Electrical Co. has a debt of 20 million now selling at 95% and a YTM of 7%. The book value of 3 million shares of common stock is $10/share. In addition, the capital mix has $5 million of preferred stock. The preferred verde082 has a price of $30 /share and a dividend of $3. The common stock is trading at $25/share. The expected dividend next year is $5 and its growth rate is 5%. What is the pre-tax WACC of this company?
Step by Step Solution
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Step: 1
Step 1 Calculate the weights of each capital component Debt Weight Debt Price Total Capitalization W...
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International Finance Putting Theory Into Practice
Authors: Piet Sercu
1st edition
069113667X, 978-0691136677
