Question
Given the following information: Percent of capital structure: Debt 35 % Preferred stock 20 Common equity 45 Additional information: Bond coupon rate 11%
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 | $ | 120.00 | |
Flotation cost, preferred | $ | 3.80 | |
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. (Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.)
Debt __________ %
Prefereed stock ________
common equity ________
Weighted average cost of capital % _________
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Basic Finance An Introduction to Financial Institutions Investments and Management
Authors: Herbert B. Mayo
10th edition
1111820635, 978-1111820633
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