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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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