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b. Blind Corporation has a target capital structure consisting of debt (bond), preferred stock, and common stock. The capital structure for Blind Corporation is as
b. Blind Corporation has a target capital structure consisting of debt (bond), preferred stock, and common stock. The capital structure for Blind Corporation is as follows: Source of Capital Debt (bond) Common Stock Market Value RM600,000 RM300,000 Debt Blind Corporation's bond have a 12 percent coupon rate paid annually, with maturity period of 15 years and sells for RM1,050. The company's marginal tax rate is 34 percent Equity The closing price for Blind Corporation's common stock is RM49 per share. Last year Blind Corporation paid a dividend of RM1.30. Dividend are expected to grow at a rate of 9 percent per year. i Calculate after tax cost of debt. (6 marks) ii. Calculate cost of common stock. (4 marks) ili. Calculate Blind Corporation's weight average cost of capital (WACC), (4 marks)
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