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Given the following information: Percent of capital structure: Debt 35% Preferred stock 20 Common equity 45 Additional information: Bond coupon rate 11 % Bond yield
Given the following information: |
Percent of capital structure: |
Debt | 35% |
Preferred stock | 20 |
Common equity | 45 |
Additional information: |
Bond coupon rate | 11 | % | |
Bond yield to maturity | 9 | % | |
Dividend, expected common | $ | 5.00 | |
Dividend, preferred | $ | 12.00 | |
Price, common | $ | 60.00 | |
Price, preferred | $ | 106.00 | |
Flotation cost, preferred | $ | 4.50 | |
Growth rate | 6 | % | |
Corporate tax rate | 35 | % | |
Calculate the Hamilton Corp.'s weighted cost of each source of capital and the weighted average cost of capital. |
Weighted Cost | |
Debt (Kd) | % |
Preferred stock (Kp) | |
Common equity (Ke) | |
Weighted average cost of capital (Ka) | % |
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