Question
Given the following information, calculate the firm's weighted average cost of capital (WACC). Market value of common stock=$60 million; market value of preferred stock=$10 million,
Given the following information, calculate the firm's weighted average cost of capital (WACC). Market value of common stock=$60 million; market value of preferred stock=$10 million, market value of debt=$30 million; cost of common stock=15%; cost of debt=10%; tax rate=40%. The preferred stock pays a constant $4 dividend and is now selling for $50 a share.
| A. 11.60% | |
| B. 12.60% | |
| C. 12.97% | |
| D. 13.32% |
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Finance Society And Sustainability
Authors: Nick Silver
1st Edition
1137560606, 978-1137560605
