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Given the following information, Percent of capital structure: Debt 40% Preferred stock 20 Common equity 40 Additional information: Bond coupon rate 12 % Bond yield
Given the following information, |
Percent of capital structure: |
Debt | 40% |
Preferred stock | 20 |
Common equity | 40 |
Additional information: |
Bond coupon rate | 12 | % | |
Bond yield to maturity | 10 | % | |
Dividend, expected common | $ | 6.00 | |
Dividend, preferred | $ | 13.00 | |
Price, common | $ | 65.00 | |
Price, preferred | $ | 108.00 | |
Flotation cost, preferred | $ | 3.50 | |
Growth rate | 5 | % | |
Corporate tax rate | 40 | % | |
Calculate the Hamilton Corp.'s weighted cost of each source of capital and the weighted average cost of capital. (Round your intermediate calculations and final answers to 2 decimal places. Omit the "%" sign in your response. Also, remember to multiply by various capital costs by the "percent of capital structure" weights.) |
Weighted cost | |
Debt (Kd) | % |
Preferred stock (Kp) | |
Common equity (Ke) | |
Weighted average cost of capital (Ka) | % |
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