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Consider the case of Kuhn Co. Kuhn Co, is considering a new project that will require an initial investment of $20 million. It has a

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Consider the case of Kuhn Co. Kuhn Co, is considering a new project that will require an initial investment of $20 million. It has a target capital structure of 45% debt, 4% preferred stock, and 51% common equity, Kuhn has noncallable bonds outstanding that mature in five years with a face value of $1,000, an annual coupon rate of 10%h, and a market price of $1,050.76. The ylieid on the company's current bonds is a good approximation of the yleld on any new bonds that it lssues. The company can sell shares of preferred stock that pay an annual dividend of $8 at a price of $95.70 per share. You can assume that Jordan does not incur any flotation costs when issuing debt and preferred stock. Kuhn does not have any retained eamings available to finance this project, so the firma will have to issue new common stock to help fund it. Its common stock is currently selling for $22.35 per share, and it is expected to pay a dividend of $1.36 at the end of next year. Flotation costs will represent 8% of the funds ralsed by issuing new common stock. The company is projected to grow at a constant rate of 9.2%, and they face a tax rate of 40%. Determine what Kuhn Company's WACC will be for this project. Kuhn Co. is considering a new project that will require an initial investment of $20 million. It has a target capital structure of 45% debt, 4% preferred stock, and $1% common equity. Kuhn has noncallable bonds outstanding that mature in five years with a face value of $1,000, an annual coupan rate of 10\%, and a market price of $1,050.76. The yield on the company's current bonds is a good approximation of the yield on any new bonds that it issues. The company can sell shares of preferred stock that pay an annual div 11.29% at a price of $95.70 per share. You can assume that Jordan does not incur any flotation costs when issuing debt and preferred stock. Kuhn does not have any retained eamings aveilable to finance this project, so 10.75% Wil have to issue new common stock to help fund it. Its common stock is currentiy seling for $22.35 per share, and it is expected to of 9.14% nd of $1.36 at the end of next year. Flotation costs will reprevent 8% of the funds raised by issuing new common stock. The compan a constant rate of 9.2%, and they face a tax rote of 40%. Determine what Kuhn Company's wACC will be for this project

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