table11-1-

Given the following information. 10% 20 70 Percent of capital structure: Debt Preferred stock Common equity Additional information: Corporate tax rate Dividend, preferred Dividend, expected common Price, preferred Corporate growth rate Bond yield Flotation cost, preferred Price, common 34% $5.00 $5.50 $101.00 4% 5% $5.20 $74.00 Calculate the weighted average cost of capital for Hadley Corporation. Line up the calculations in the order shown in Table 111 (Round intermediate calculations to 2 decimal places. Round the final answers to 2 decimal places.) Weighted Cost 33 % Debt (ka) Preferred stock (Kp) Common equity (Ke) 5.22 11.43 Weighted average cost of capital (K) 9.38% Cost (after tax) 6.55%. 10.94 12.00 Weights 30% 10 Debt..... K Preferred stock... K Common equity (retained earnings)... K Weighted average cost of capital ...... K Welghted Cost 1.97% 1.09 7.20 10.26% P 60 Table 11-1 Cost of capital-Baker Corporation