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Hamilton Corporation has decided to seek outside financing. The CFO is attempting to compute Hamilton's weighted average cost of capital. You have been provided the
Hamilton Corporation has decided to seek outside financing. The CFO is attempting to compute Hamilton's weighted average cost of capital. You have been provided the following information.
Capital Structure | Weight | Cost |
Debt | 30.00% | 11.60% |
Preferred | 15.00% | 12.10% |
Common Equity | 55.00% | 16.70% |
The weighted average cost of capital for Hamilton is:
A. | 14.5% | |
B. | Not enough information to compute the answer. | |
C. | 5.6% | |
D. | 17.6% | |
E. | No answers are correct. |
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