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Finding the Weighted Average Cost of Capital (WACC): You are given the following information for GoodConstruction, Inc. Assume the company's tax rate is 24%: Debt:

Finding the Weighted Average Cost of Capital (WACC):

You are given the following information for GoodConstruction, Inc. Assume the company's tax rate is 24%:

Debt: $30,000,000 of face value of bonds outstanding with 6.0% coupon rate, 8 years to maturity, selling at 95 percent of the face value; the bonds make semiannual payments. The company has no additional debt
Common stock: 1,000,000 shares outstanding, selling for $65 per share; the beta is 1.5.
Preferred stock: 600,000 shares of preferred stock outstanding, currently selling for $50 per share, and dividend of $4.5 per share
Market Information: 7.5% market risk premium and 4.00% risk-free rate.

  1. What are the Capital Structure Weights? (WE, WD, and WPS)
  2. What is the company's cost of debt (Pre-tax and After-tax)?
  3. What is the company's cost of common stock?
  4. What is the company's cost of preferred stock?

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