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rse D Question 8 12 pts You have been assigned to calculate the Weighted-Average-Cost-of-Capital for your firm, which has three sources of long-term capital.
rse D Question 8 12 pts You have been assigned to calculate the Weighted-Average-Cost-of-Capital for your firm, which has three sources of long-term capital. The company's marginal tax rate is 25%. First, there are 207,500 shares of common stock, which are currently selling for $41.93. You estimate that the firm's Beta is 1.20. The current return on short-term T-Bill is 1.25%, and you expect the long-term return on the stock market to be about 9.75%. Second, there are 45,000 shares of preferred stock that pay an annual (perpetual) dividend of $3.15, and the cuurrentshare price is 37.40. Third, there is an issue of 4,500 coupon bonds with a face value of $1,000, which pays 5.10% (annual) coupons, and mature in eleven years. These bonds are currently trading for $948.07. What is the firm's weighted-average-cost-of-capital? 9.42% O9.02% 07.08% 8.77%
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