Question
Peter's Audio has a yield to maturity on its debt of 6.4 percent, a cost of equity of 11.4 percent, and a cost of preferred
Peter's Audio has a yield to maturity on its debt of 6.4 percent, a cost of equity of 11.4 percent, and a cost of preferred stock of 9 percent. The firm has 115 shares of common stock outstanding at a market price of $24 a share. There are 15 shares of preferred stock outstanding at a market price of $40 a share. The bond issue has a total face value of $1,500 and sells at 97 percent of face value. If the tax rate is 25 percent and assuming all interest is tax deductible.
What is the pre-tax cost of debt? (Rounded to two decimal place)
What is the weighting for debt? (Rounded to two decimal place)
What is the after-tax cost of debt? (Rounded to two decimal place)
What is the cost of the preferred stock?(Rounded to two decimal place)
What is the weighting for the preferred stock? (Rounded to two decimal place)
What is the cost of the common stock? (Rounded to two decimal place)
What is the weighting of the common stock? (Rounded to two decimal place
What is the WACC?(Rounded to two decimal place)
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