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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. Capital Structure Debt Preferred Stock 10% Common Equity 60% Information Bond Yeild to Maturity (Ytm) 5% Corp Tax Rate Dividends (preferred stock) $ 1.75 Price (perferred 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? Preferred Cost? Common Weighted Average Cost?

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