Question
Wildhorse Corporation is financed with debt, preferred equity, and common equity with market values of $25 million, $13 million, and $32 million, respectively. The betas
Wildhorse Corporation is financed with debt, preferred equity, and common equity with market values of $25 million, $13 million, and $32 million, respectively. The betas for the debt, preferred stock, and common stock are 0.3, 0.5, and 1.2, respectively. The risk-free rate is 4.00 percent, the market risk premium is 6.01 percent, and Wildhorses average and marginal tax rates are both 30 percent. Excel Template (Note: This template includes the problem statement as it appears in your textbook. The problem assigned to you here may have different values. When using this template, copy the problem statement from this screen for easy reference to the values youve been given here, and be sure to update any values that may have been pre-entered in the template based on the textbook version of the problem.)
(a1)
What is the companys cost of capital? (Round intermediate calculation to 4 decimal places, e.g. 1.2512 and final answers to 3 decimal places e.g. 5.215%.)
Costs of debt | % | ||
Costs of common equity | % | ||
Costs of preferred equity |
Costs of debt ? Costs of common Equity? Costs of preferred equity ?
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