Question
Blue corporation can issue new debt with a coupon rate of 10% and has a marginal tax rate of 35%.The firm's common stock currently sells
Blue corporation can issue new debt with a coupon rate of 10% and has a marginal tax rate of 35%.The firm's common stock currently sells for $30 a share and has a growth rate of 5%.The next dividend is expected to be $3.00.The firm's preferred stock is currently selling for $55 with a dividend of $6 a share.The firm's target capital structure is 30% debt, 10% preferred stock, and the remainder common equity.What is the firm's after-tax cost of debt?What is the firm's cost of common equity?What is the firm's cost of preferred stock?What is the firm's WACC?
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