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You have been assigned to calculate the Weighted-Average-Cost-of-Capital for your firm, which has two sources of long-term capital. Continue with the values and assumptions outlined

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You have been assigned to calculate the Weighted-Average-Cost-of-Capital for your firm, which has two sources of long-term capital. Continue with the values and assumptions outlined above. The company's marginal tax rate is 25%. First, there are 207,500 shares of common stock, which are currently selling for $41.93. Recently, the firm announced EPS of $3.87. You feel that it is reasonable to assume that earnings will grow at 1.35% into the future. Second, there is an issue of 4,500 coupon bonds with a face value of $1,000, which pays 5,10% (annual) coupons, and mature in eleven years. These bonds are currently trading for $948.07. Fourth, what is the firm's weighted-average-cost-of-capital? 8.60% 8.23% 7.18% 6.B0%

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