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CNNs capital structure is made of 50% ordinary shares; 30% preference share and 20% debt, cost of debt is 9 per cent. The risk-free rate
CNNs capital structure is made of 50% ordinary shares; 30% preference share and 20% debt, cost of debt is 9 per cent. The risk-free rate is 3%, beta of CNN is 1.20 and the market risk premium is 12%. The current price of CNN preference share is $10 with a dividend of $1.25 a share. The corporate tax rate is 30%. Calculate CNNs Weighed Average Cost of Capital (WACC).
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