mining the cost of Capital The CFO of Purple Lemon Fruit Company is trying to determine the company's WACC. He has determined that the company's before-ta of debt is 9.60%. The company currently has $100,000 of debt, and the CFO believes that the book value of the company's debt is a goc approximation for the market value of the company's debt. . The firm's cost of preferred stock is 10.70%, and the book value of preferred stock is $10,500. . Its cost of equity is 13.50%, and the company currently has $85,000 of common equity on its balance sheet. The CFO has estimated that the firm's market value of preferred stock is $30,000, and the market value of its common equity is $140,000. If Purple Lemon is subject to a tax rate of 40%, Purple Lemon Fruit Company's WACC is decimal places.) (Note: Round your answer to tw Consider the case of Purple Panda Products Purple Panda Products is considering a new project that will require an initial investment of $4 million. It has a target capital structure of debt, 4% preferred stock, and 51% common equity. Purple Panda has noncallable bonds outstanding that mature in 15 years with a face of $1,000, an annual coupon rate of 11%, and a market price of $1,555.38. The yield on the company's current bonds is a good approxir of the yield on any new bonds that it issues. The company can sell new shares of preferred stock that pay an annual dividend of $8 at a of $95.70 per share. Assume that Purple Panda new preferred shares can des sold without incurring flotation costs. Purple Panda does not have any retained earnings available to finance this project, so the firm will have to issue new common stock to fund it. Its common stock is currently selling for $22.35 per share, and it is expected to pay a dividend of $1.36 at the end of next year. Flotation costs will represent 8% of the funds raised by issuing new common stock. The company is projected to grow at a constant rate 9.2%, and they face a tax rate of 40%. mining the cost of Capital The CFO of Purple Lemon Fruit Company is trying to determine the company's WACC. He has determined that the company's before-ta of debt is 9.60%. The company currently has $100,000 of debt, and the CFO believes that the book value of the company's debt is a goc approximation for the market value of the company's debt. . The firm's cost of preferred stock is 10.70%, and the book value of preferred stock is $10,500. . Its cost of equity is 13.50%, and the company currently has $85,000 of common equity on its balance sheet. The CFO has estimated that the firm's market value of preferred stock is $30,000, and the market value of its common equity is $140,000. If Purple Lemon is subject to a tax rate of 40%, Purple Lemon Fruit Company's WACC is decimal places.) (Note: Round your answer to tw Consider the case of Purple Panda Products Purple Panda Products is considering a new project that will require an initial investment of $4 million. It has a target capital structure of debt, 4% preferred stock, and 51% common equity. Purple Panda has noncallable bonds outstanding that mature in 15 years with a face of $1,000, an annual coupon rate of 11%, and a market price of $1,555.38. The yield on the company's current bonds is a good approxir of the yield on any new bonds that it issues. The company can sell new shares of preferred stock that pay an annual dividend of $8 at a of $95.70 per share. Assume that Purple Panda new preferred shares can des sold without incurring flotation costs. Purple Panda does not have any retained earnings available to finance this project, so the firm will have to issue new common stock to fund it. Its common stock is currently selling for $22.35 per share, and it is expected to pay a dividend of $1.36 at the end of next year. Flotation costs will represent 8% of the funds raised by issuing new common stock. The company is projected to grow at a constant rate 9.2%, and they face a tax rate of 40%