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Mr . Velasco's Classroom Inc. currently has 3 0 , 0 0 0 of its 9 % semiannual coupon bonds outstanding ( Par value =
Mr Velasco's Classroom Inc. currently has of its semiannual coupon bonds outstanding Par value The bonds will mature in fifteen years and are currently priced at $ per bond. The firm also has an issue of million preferred shares outstanding with a market price of $ The preferred shares offer an annual dividend of $ Velasco Inc. also has million shares of common stock outstanding with a price of $ per share. The firm is expected to pay a $ common dividend one year from today, and that dividend is expected to increase by per year forever. The firm typically pays floatation costs which is a fancy name for commission of of the price on all newly issued securities BOTH stocks and bonds, don't forget! If the firm is subject to a marginal tax rate, then what is the firms weighted average cost of capital?
What's the cost of debt before tax
What's the cost of preferred stock after floatation cost?
What's the cost of common stock after floatation cost if you use the constant dividend growth model Gordon Model
What is the market value weight of each of the three components of WACC debt preferreds, common
What is the WACC, make sure it's after tax so calculate the after tax cost of debt to arrive at WACC
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