Q13

Q14

Question 13 1 pts You were hired as a consultant to Keys Company, and you were provided with the following data: Target capital structure: 32% debt, 10% preferred, and 58% common equity. The after-tax cost of debt is 3.6%, the cost of preferred is 6.5%, and the cost of retained earnings is 15%. The firm will not be issuing any new stock. What is the firm's WACC? O 9.50% O 10.00% O 11.50% O 10.50% O 11.00% Hatch Corporation's target capital structure is 40 percent debt, 15 percent common stock, and 45 percent preferred stock. Information regarding the company's cost of capital can be summarized as follows: The company's bonds have a nominal yield to maturity of 7.6 percent. The company's preferred stock sells for $44 a share and pays an annual dividend of $1 a share. The company's common stock sells for $29 a share, and is expected to pay a dividend of $3 a share at the end of the year (i.e., D1 = $3). The dividend is expected to grow at a constant rate of 2 percent a year. The firm will be able to use retained earnings to fund the equity portion of its capital budget. The company's tax rate is 39 percent. What is the company's weighted average cost of capital (WACC)? 0 4.73% 05.03% O 4.43% O 4.13% O 5.33%