Question
Oriole Luxury Liners has preferred shares outstanding that pay an annual dividend equal to $27 per year. If the current price of Oriole preferred shares
Oriole Luxury Liners has preferred shares outstanding that pay an annual dividend equal to $27 per year. If the current price of Oriole preferred shares is $158.82, what is the after-tax cost of preferred stock for Oriole?
Crane Co. has a capital structure, based on current market values, that consists of 25 percent debt, 11 percent preferred stock, and 64 percent common stock. If the returns required by investors are 8 percent, 10 percent, and 15 percent for the debt, preferred stock, and common stock, respectively, what is Crane's after-tax WACC? (Assume that the firm's marginal tax rate is 40 percent.)
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