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The company estimates that it can issue debt at a rate of r d = 1 2 % , and its tax rate is 2
The company estimates that it can issue debt at a rate of and its tax rate is It can issue preferred stock that pays a
constant dividend of $ per year at $ per share. Also, its common stock currently sells for $ per share; the next
expected dividend, is $ and the dividend is expected to grow at a constant rate of per year. The target capital
structure consists of common stock, debt, and preferred
stock.
What is the cost of each of the capital components? That is what is the cost of debt, cost of preferred, and cost of equity?
What is Serenity's Super Sopapillas' WACC?
Only projects with expected returns that exceed the WACC will be accepted. Which projects should Serenity's Super
Sopapillas accept? What is the dollar amount of Serenity's Super Sopapillas' optimal capital budget?
I would like this laid out in excel with proper formulas to show my work.
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