Question
Target % in Capital Structure Debt 40% Preferred Stock 10% Equity 50% Tax Rate = 34% Outstanding Bond Preferred Stock Info Common Stock Info (Annual
| Target % in Capital Structure |
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| Debt | 40% |
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| Preferred Stock | 10% |
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| Equity | 50% |
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| Tax Rate = | 34% |
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| Outstanding Bond |
| Preferred Stock Info | Common Stock Info |
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| (Annual Coupons) |
| Preferred Divided | $3.00 | Current Dividend | $3.00 |
| Time to Maturity (years) | 10 | Current Market Price | $60.00 | Current Price | $50.00 |
| Coupon Rate APR | 5.00% | Preferred Yield | 5.00% | Expected Growth in Dividends | 2.16% |
| Face Value | $1,000 |
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| Expected Return on Equity | 8.29% |
| Current Market Price | $1,240 |
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| YTM | 2.29% |
Using the information in the table, what is the firms WACC?
State your answer as a percentage to two decimal places (e.g., 5.30)
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Bank Strategy, Governance And Ratings
Authors: P. Molyneux
3rd Edition
0230313345, 9780230313347
