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QUESTION 27 You are the owner of Rocky's Campus Bookstore and are looking to determine the companies' weighted average cost of capital. In college you
QUESTION 27 You are the owner of Rocky's Campus Bookstore and are looking to determine the companies' weighted average cost of capital. In college you took a corporate finance class and have gathered the data that you need. a. You feel that the correct capital structure is 50% debt, 10% preferred stock, and 40% common stock. b. The risk free rate is 1.5%, beta is .8, and the market risk premium is 6.75% c. The preferred stock dividend is $5.40 per share was issued at par for $100 and currently trades at $84.50 d. There is one bond issue which has 10 years till it matures, a 4.5% annual coupon, par value of $1,000, and currently trades at $1,035.92 e. The company's tax rate is 21%. What is Rocky's Campus Bookstore's cost of common stock? Please round to two decimal points. The company has a cost of preferred stock of? What is Rocky's pre-tax cost of debt? n i PV pmt FV What is the weighted average cost of capital?
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