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QUESTION 11 Weston Company has 500,000 shares of common stock outstanding at a market price of $54 a share. Last month, Weston paid an annual
QUESTION 11 Weston Company has 500,000 shares of common stock outstanding at a market price of $54 a share. Last month, Weston paid an annual dividend in the amount of $1.10 per share. The dividend growth rate is 5%. Weston also has 15,000 bonds outstanding with a face value of $1,000 per bond. The bonds carry a 5% coupon, pay interest annually, and mature in 15 years. The bonds are selling at 102% of face value. The company's tax rate is 25%. What is Weston's weighted average cost of capital? 5.86% 6.06% 6.26% 6.46% ? 6.66%
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