Johnson Industries finances its projects with 40% debt, 10% preferred stock and 50% common stock. The company
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Johnson Industries finances its projects with 40% debt, 10% preferred stock and 50% common stock.
The company can issue bonds at a YTM of 8.4%
The cost of preferred stock is 9%.
The company's common stock currently sells for $30 per share.
Next years dividend is expected to be $2.12 and is expected to grow at 6% per year indefinitely.
The company's tax rate is 30%.
What is the company's WACC using internal equity (retained earnings)?[Chapter 12]
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