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Details of the capital structure of Webber Ltd. appear below: Bonds Number issued 27,000 Coupon rate 6% Interest payments semi-annually Years to maturity 10 Current
Details of the capital structure of Webber Ltd. appear below:
Bonds Number issued 27,000
Coupon rate 6%
Interest payments semi-annually
Years to maturity 10
Current price $90
Preferred shares
Number issued 1.5 million.
Dividend per share $2
Current price $25
Common shares
Number issued 3.5 million
Next dividend per share $3
Dividend growth rate 6.5%
Current price $30
Flotation costs
Bonds 5%
Preference shares 6%
Common shares 7%
Required: The companys tax rate is 30%. Calculate the companys weighted average cost of capital
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