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The risk free rate is 5.44% and the market risk premium is 3.06%. A firm recently paid a $3.22 prefered stock dividend per share while
The risk free rate is 5.44% and the market risk premium is 3.06%. A firm recently paid a $3.22 prefered stock dividend per share while its price is $100 per share. The firm's 6.65% coupon bond issue trades at $976 and matures in 10 years. The firm's beta is 1.20. The firm's tax rate is 23%. The firm's capital structure for its common stock, preferred stock and debt (bond) is 50%, 25% and 25% respectively. What is the Weighted Average Cost of Capital? Multiple Choice 7.11% 9.97% 6.03% 6.71%
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