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Continue using the information about Chambord Co. from the previous question: Chambord Co. has 14 million shares of common stock outstanding, 760,000 shares of preferred
Continue using the information about Chambord Co. from the previous question: Chambord Co. has 14 million shares of common stock outstanding, 760,000 shares of preferred stock outstanding, and 180,000 long term bonds (par $1,000 each) outstanding. Currently the common stock sells for $35 per share, the preferred stock sells for $84 per share, and the bonds sell for 95% of par. The preferred stock pays a constant $2.10 annual dividend per share. Its equity beta is 1.1, pretax cost of debt is 10%, and tax rate is 40%. The market expected return is 15%. The risk free rate is 5%. The weight of Chambord's common equity to be used in WACC calculation is 80.80% 55.55% 67.60% 8.81%
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