Turbine Technologies Ltd. (TTL) currently have bonds outstanding which trade at 104, have a coupon rate of 6% paid semi-annually and mature in 10 years.Any new bonds issued would be, (at the request of a large institutional investor) sold initially at 98, which is a small discount to their par value.Assume issuance costs are negligible.

The preferred stock has a fixed divided rate of 6.25% and a par value of $25 per share.Their current market value is $26 per share.New preferred stock would be issued at their par value. Flotation costs are estimated at 3%.

TTL has 600,000 common shares outstanding with a market value of $26 per share.The upcoming dividend is expected to be $1.36 and the dividend growth rate is expected to be 3%.The firm has a beta of 0.90 and the current yield on long-term government bonds is 4.3%.The yield on the market portfolio is expected to be 10%.Determine the cost of common equity using the simple average of the dividend valuation and capital asset pricing model approaches.Assume that Guard Co.'s common equity is from internal sources.Guard Co.'s tax rate is 30%.

Turbine Technologies Ltd. Balance Sheet as at December 31, 2018 {in thousands) m Accounts receivables 2,990 Other short term liabilities 250 Inventory _3, Total current liabilities 1,750 Total current assets _6,@ Longterm bonds _6, Net fixed assets it Total liabilities 7,950 Preferred stock 3,000 Common stock 4,000 Retained earnings 11, Total common equity 18,500 Total assets S 26,450 Total liabilities and equity .5 26,450 Turbine Technologies Ltd. [TTL) currently have bonds outstanding which trade at 104, have a coupon rate of 6% paid semiannually and mature in 10 years. Any new bonds issued would be, (at the request of a large institutional investor) sold initially at 98, which is a small discount to their par value. Assume issuance costs are negligible. The preferred stock has a fixed divided rate of 6.25% and a par value of $25 per share. Their current market value is $26 per share. New preferred stock would be issued at their par value. Flotation costs are estimated at 3%. TTL has 600,000 common shares outstanding with a market value of $26 per share. The upcoming dividend is expected to be $1.36 and the dividend growth rate is expected to be 3%. The firm has a beta of 0.90 and the current yield on longterm government bonds is 4.3%. The yield on the market portfolio is expected to be 10%. Determine the cost of common equity using the simple average of the dividend valuation and The preferred stock has a fixed divided rate of 6.25% and a par value of 525 per share. Their current market value is $26 per share. New preferred stock would be issued at their par value. Flotation costs are estimated at 3%. TTL has 600,000 common shares outstanding with a market value of $26 per share. The upcoming dividend is expected to be $1.36 and the dividend growth rate is expected to be 3%. The firm has a beta of 0.90 and the current yield on longterm government bonds is 4.3%. The yield on the market portfolio is expected to be 10%. Determine the cost of common equity using the simple average of the dividend valuation and capital asset pricing model approaches. Assume that Guard Cofs common equity is from internal sources. Guard Co.'s tax rate is 30%. Required: Compute TTL's weighted average cost of capital. The next page is blank if you require additional room to document your analysis