Question
The capital structure for Capital Health is provided below. If the firm has a 8% after tax cost of long term debt, 12% commerical loan
The capital structure for Capital Health is provided below. If the firm has a 8% after tax cost of long term debt, 12% commerical loan rate, 6% commerical paper rate, short term bond rate of 5%, a 9% cost of preferred stock, and an 15% cost of common stock, what is the firm's weighted average cost of capital (WACC)? #2 #3 Capital Structure (in K's) Weights Individual Costs Weighted Costs Long Term Bonds $3,000 8.00% Commercial Loans $2,845 12.00% Commercial Paper $1,500 6.00% Short Term Bonds $1,200 5.00% Preferred Stock $500 9.00% Common Stock $4,500 15.00% #1 = #4 =WACC
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