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please use excel Johnston Industries finances its projects with 35% debt, 10% preferred stock and 55% common stock. The company can issue bonds at a
please use excel
Johnston Industries finances its projects with 35% debt, 10% preferred stock and 55% common stock. The company can issue bonds at a YTM of 8.6%. The cost of preferred stock is 9%. The company's common stock currently sells for $45.43 per share. The current dividend just paid is $3.00 (DO) and is expected to grow at 6% per year indefinitely. Calculate the cost of equity using the dividend growth model. Beta of stock is 1.25: Risk-free rate is 3% and market rate of return is 11% calculate the cost of equity using CAPM. (Overall cost of common equity is the average of the above two calculations using the dividend growth model and CAPM)) The company's tax rate is 25% What is the company's WACC using the cost equity, cost of debt and cost of preferred stock calculated from the above narrative Step by Step Solution
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