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Given the following information. Percent of capital structure: Debt Preferred stock Common equity Additional information: Bond coupon rate. Bond yield Dividend, expected common Dividend, preferred
Given the following information. Percent of capital structure: Debt Preferred stock Common equity Additional information: Bond coupon rate. Bond yield Dividend, expected common Dividend, preferred Price, common Price, preferred Flotation cost, preferred 4% Corporate growth rate Corporate tax rate 35% Calculate the weighted average cost of capital for Genex Corporation. Line up the calculations in the order shown in Table 11-1. (Do not round your intermediate calculations and round your final answers to 2 decimal places.) Weighted Cost % Debt (Kd) Preferred stock (Kp) Common equity (Ke) Weighted average cost of capital (Kg) % 30% 15 55 9% 7% $5.00 $12.00 $60.00 $136.00 $6.20 Table 11-1 Cost of capital-Baker Corporation Debt Preferred stock Common equity (retained earnings) Weighted average cost of capital Kd Ke Ka Cost (after tax) Weights Weighted Cost 6.55% 30% 1.97% 10.94 10 1.09 12.00 60 7.20 10.26%
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