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Target % in Capital Structure Component Cost (pre-tax) Component Cost (after-tax) Weighted Component Cost Debt 25.00% Preferred Stock 8.00% Equity 67.00% Tax Rate = 35.00%
| Target % in Capital Structure | Component Cost (pre-tax) | Component Cost (after-tax) | Weighted Component Cost | ||
| Debt | 25.00% | ||||
| Preferred Stock | 8.00% | ||||
| Equity | 67.00% | ||||
| Tax Rate = | 35.00% | WACC = | |||
| Outstanding Bond | Preferred Stock Info | Common Stock Info | |||
| (Annual Coupons) | Preferred Divided | 2 | Current Dividend | $3.00 | |
| Time to Maturity (years) | 10 | Current Market Price | 45 | Current Price | $81.00 |
| Coupon Rate APR | 6.00% | Preferred Yield | 4.44% | Expected Growth in Dividends | 3.00% |
| Face Value | $1,000.00 | Expected Return on Equity | 6.81% | ||
| Current Market Price | $1,000.00 | ||||
| YTM | 6.00% |
Based on the information in the table, what is the WACC?
Group of answer choices
6.19%
6.01%
5.90%
5.60%
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Public Finance
Authors: Harvey S. Rosen
5th Edition
025617329X, 978-0256173291
