part B

Yoyo company cost of retained earnings is 15%, of preferred stock is 27% and its cost of debt %9. The optimal capital structure is 50%common stock, 15% preferred stock and 35% of debt. The firm not be issuing any new stock and the marginal tax rate 35%%What is the weighted average cost of capital for YOYO company ?

8. Yoyo Company issued a 15-year non-callable bond, 5 years ago. It pays semi-annual coupons with a coupon rate of 10% and has a current market price of $1,108.97 now. If the firm's tax rate is 35%, what is the component cost of debt that is used in the WACC calculation? 5.17% 5.44% 5.77% 0 410 2.72%