Calculate the Components of WACC and the WACC Cost Debt: of 30 year Bonds Current Price 101.5% of par value 7.6% Coupon Rate Semi Annual Bond 12 years to maturity Tax Rate: 40% What is the cost of Debt? Preferred Stock $7.50 $60.00 Dividend Current Price What is the cost of Preferred? 6.50% Equity 6.25% Risk Free Rate Market Risk Premiur 0.7 Stock Beta What is the cost of Equity? Debt/Equity 10,000 Bonds outstanding Selling 101.5% of Par Value 43,000 preferred Stock $60.00 300,000 Shares of Common Stock $40.00 per share What is the WACC? Given the WACC Cal $300,000 Investment is: Cash Flows 55,000 65,000 1st Year 2nd Year 75,000 3rd Year 85,000 4th Year 150,000 5th Year Accept Reject NPV is After Tax