Weighted Average Cost of Capital WACC

$(1)$ Debt uev$>$ Long

Suppose that a given company has outstanding debt of $$50,000,000,$ preferred $(3)$ commen stoch common stock of $$70,000,000,$ and the tax rate is $3\%.$ and the tax rate $34\%.$

In addition, suppose that the company has patd $$4,000,000$ in interest expense on its debt and paid a $$1,500,000$ dividend on its preferred stock.

The expected earnings per share next year are $$2.$ The current market value of the stock is $$18.$ The historical growth rate for dividend payments is $2\%.$

Required: calculate the Weighted Average Cost of Capital $-$WACC

Suppose that a given company has paid $350$ dividend on its preferred stock. Its before$-$tax cost of debt is $13\%,$ and its marginal tax rate is $40\%.$ The stock sells at book value using the following balance sheet. However, suppose that the current market share price is $12$ and the expected EPS is $1\mathrm{.}5,$ where the growth rate is $2\%.$ Calculate the after$-$tax WACC

$w_{\text{a}\text{c}\text{k}}=w_{d}k{k}_d(1-T_u{r}_a{t}_e)(+-)wp**kp()w_c**k_s$

$=(0,2823**0\mathrm{.}13)**(1-\%40)o+(0\mathrm{.}4235**0,2625)o+(,12341**0\mathrm{.}145)$

$=0\mathrm{.}15$