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Trucks R Us has 1.3 million shares of stock outstanding, and theyre currently worth $82 per share. The dividend ratio is 13%, and the stocks
Trucks R Us has 1.3 million shares of stock outstanding, and theyre currently worth $82 per share. The dividend ratio is 13%, and the stocks dividends are expected to grow at 3% per year. The firm also has 50,000 bonds outstanding that are selling at par. The coupon rate is 6.5%. Par value of the bonds is $1,000 each. The corporate tax rate is 34 percent. What is the firms weighted average cost of capital? Use dividend growth model
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