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Given the following information: Percent of capital structure: Debt 10 % Preferred stock 5 Common equity 85 Additional information: Bond coupon rate 7% Bond yield
Given the following information:
Percent of capital structure:
Debt | 10 | % |
Preferred stock | 5 | |
Common equity | 85 | |
Additional information:
Bond coupon rate | 7% | ||
Bond yield to maturity | 5% | ||
Dividend, expected common | $ | 3.00 | |
Dividend, preferred | $ | 10.00 | |
Price, common | $ | 50.00 | |
Price, preferred | $ | 132.00 | |
Flotation cost, preferred | $ | 4.20 | |
Growth rate | 8% | ||
Corporate tax rate | 40% |
Calculate the Hamilton Corp.'s weighted cost of each source of capital and the weighted average cost of capital.
Debt
Preferred Stock
Common Equity
Weighted Average Cost of Capital
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