Question
Zietlow Corporation has 2.11 million shares of common stock outstanding with a book value per share of 75$ with a recent divided of 3.4$. The
Zietlow Corporation has 2.11 million shares of common stock outstanding with a book value per share of 75$ with a recent divided of 3.4$. The firm's capital includes 290000 shares 67% preferred stock outstanding with a par value of 100 and the firms debt include 2250 6.5 percent quarterly bonds outstanding with 25 years maturity issued yeago. The current trading pris of the preferred stock and bonds are 106% of its par value and comomon stock trades for 15$ with a constant growth rate of 6%. The beta of the stock is 1.13dthekel risk premium is 7% Calculate after tax Weighted Avergae Cost of Capital of the firm assuming a tax rate of 30%.
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