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Use Microsoft Excel. Firm B has a tax rate = 35%; 20-year, 8% coupon, semiannual payment noncallable bonds selling for $900; 10%, $100 par value,
Use Microsoft Excel. Firm B has a tax rate = 35%; 20-year, 8% coupon, semiannual payment noncallable bonds selling for $900; 10%, $100 par value, quarterly dividend, perpetual preferred stock sells for $94; Common stock sells for $30 with D0 = $2 and g = 4%; the firm has beta = 1.2; rRF = 7%; RPM = 6%; the Bond-Yield Risk Premium = 5% and there are 1,000 bonds, 100 preferred shares, and 35,000 common equity shares. What is the WACC?
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