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Assume Company D, has the following Capital Structure. Debt 30%, Pref Stock 10%, Common Equity 60%. It cost the company a Corp Tax Rate of

Assume Company D, has the following Capital Structure. Debt 30%, Pref Stock 10%, Common Equity 60%. It cost the company a Corp Tax Rate of 35% to do business. Calculate the Cost of Capital for each of the companies components as well as the Weighted Average Cost of Capital.

Capitol Structure
Debt
Preferred Stock 10%
Common Equity 60%
Information
Bond Yield to Maturity (Ytm) 5%
Corp Tax Rate
Dividends ( preferred stock) $1.75
Price (preferred stock) $25.00
Floatation Cost $1.00
Dividends (common stock) $1.00
Price ( common stock) $15.00
Growth Rate Common Stock 2%
Find:
Cost of debt
Cost of preferred
Cost of common
Weighted average cost

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