Martin Industries (MI) has 5 million common shares outstanding which sell for $50 per share. MI just paid a common dividend of $4.00 per share, and investors and analysts expect all future dividends to grow by 5% per year, indefinitely. The current risk-free rate is 1.50%, the expected return on the market is 10%, and the stock has a beta of 2. MI also has 2 million shares of 12% preferred stock outstanding (par value of $100) selling for $40 per share. And, MI has 250,000 20-year, 12% annual coupon bonds outstanding, currently selling for 110% of par. If MI is in the 35% tax bracket, then what is the firms WACC? You will calculate each part of the WACC in the following questions. calculate 1.What is w_d? 2.What is w_p? 3.What is w_s? 4.What is r_d? 5.What is r_p? 6.What is r_s? 7.What is the firm's WACC?

[Ch 10] Martin Industries (MI) has 5 million common shares outstanding which sell for $50 per share. MI just paid a common dividend of $4.00 per share, and investors and analysts expect all future dividends to grow by 5% per year, indefinitely. The current risk-free rate is 1.50%, the expected retum on the market is 10%, and the stock has a beta of 2. MI also has 2 million shares of 12 preferred stock outstanding (par value of $100) selling for $40 per share. And MI has 250,000 20-year, 12% annual coupon bonds outstanding, currently selling for 110% of par. If MI is in the 35% tax bracket, then what is the fim's WACC? You will calculate each part of the WACC in the following questions