Question
IIA Corp. borrowed a non-amortized loan (debt) worth $3,000,000. It also has 50,000 shares of preferred stocks outstanding valued at $10 per share, and 1,000,000
IIA Corp. borrowed a non-amortized loan (debt) worth $3,000,000. It also has 50,000 shares of preferred stocks outstanding valued at $10 per share, and 1,000,000 shares of common stocks outstanding valued at $6.5 per share. IAA Corp.'s debt has a cost of 5%. preferred stock has a cost of 10%, and common stock has a cost of 30%. What is IIAs weighted average cost of capital?
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International Financial Management
Authors: Jeff Madura
2nd Edition
0314430296, 978-0314430298
