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Turnbull Co. has a target capital structure of 45% debt, 4% preferred stock, and 51% common equity. It has a before-tax cost of debt of 8.2%, and its cost of preferred stock is 9.3%. If Turnbull can raise all of its equity capital from retained earnings, its cost of common equity will be 12.4%. However, if it is necessary to raise common equity, it will carry a cost of 14.2%. If its current tax rate is 25%, how much higher will Turnbull's weighted average cost of capital (WACC) be if it has to raise additional common equity capital by issuing new common stock instead of raising the funds through retained earnings? (Note: Round your intermediate calculations to two decimal places.) 0.83%0.92%1.06%1.15% Turnbull Co. is considering a project that requires an initial investment of $1,708,000. The firm will raise the $1,708,000 in capital by issuing $750,000 of debt at a before-tax cost of 10.2%,$78,000 of preferred stock at a cost of 11.4%, and $880,000 of equity at a cost of 14.3%. The firm faces a tax rate of 25%. What will be the WACC for this project? (Note: Round your intermediate calculations to three decimal places.) Consider the case of Kuhn Co. Kuhn Co. is considering a new project that will require 9.56% nvestment of $20 million. It has a target capital of 11%, and a market price of $1555.38. The yield on issues. The company can sell shares of preferred stoct an annual dividend of $8 at a price of $95.70 per share. Turnbull Co. is considering a project that requires an initial investment of $1,708,000. The firm will raise the $1,708,000 in capital by issuing $750,00 of debt at a before-tax cost of 10.2%,$78,000 of preferred stock at a cost of 11.4%, and $880,000 of equity at a cost of 14.3%. The firm faces a tax rate of 25%. What will be the WACC for this project? (Note: Round your intermediate calculations to three decimal places.) Consider the case of Kuhn Co. Kuhn Co. is considering a new project that will require an initial investment of $20 million. It has a target capital structure stock, and 63% common equity. Kuhn has noncallable bonds outstanding that mature in 15 years with a face value of $1,000, an annual coupon rate of 11%, and a market price of $1555.38. The yield on 14.37% iny's current bonds is a good approximation of the issues. The company can sell shares of preferred stocl 13.13% Kuhn does not have any retained earnings available to 11.25% is project, so the firm will have to issue new common stock to help fund it. Its common stock is currently selling for $33.35 per share represent 3% of the funds raised by issuing new comr 12.50% expected to pay a dividend of $2.78 at the end of next year. Flotation costs will rate of 25%. What will be the WACC for this project? The company is projected to grow at a constant rate of 8.7%, and they face a tax (Note: Round your intermediate calculations to two decimal places.)
