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Use the following information to calculate the firms weighted average cost of capital: a. The dividend for preferred shares is $5, and the current price
Use the following information to calculate the firms weighted average cost of capital: a. The dividend for preferred shares is $5, and the current price for preferred stock is $75. b. The rate of return on long-term debt is 6%, the rate of return on short-term debt is 5%, and the marginal tax rate is 35%. c. The market risk premium is 5%, the risk-free rate is 3%, and the firm has a beta of 0.9. d. The firms capital structure is as follows: long-term debt is 25%, short-term debt is 4%, preferred stock is 2%, and common stock is 69%.
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