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Cost of Capital: Find the WACC given the following information. XYZ issues 100 10-year bonds selling at $970 with a par of $1000. They have

Cost of Capital: Find the WACC given the following information. XYZ issues 100 10-year bonds selling at $970 with a par of $1000. They have a coupon of 10% paid semiannually. XYZ issues 1000 shares of preferred stock selling at $50 with an annual dividend of 5% based on $100 par. XYZ issues 10000 common shares at $7. XYZ just paid a dividend of $0.25. Investors require a 200% return. Taxes are at 20%. Assume no flotation costs. Dividends have been paid over the past 5 years:

1

$0.01

2

$0.02

3

$0.04

4

$0.08

5

$0.16

Place all data, ratios, calculations, findings, etc. in the first Excel sheet with references to the information in other sheets.

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