Question Description
I’m working on a Business exercise and need support.
Write the problem out with the answer. Need by 11:59PM CST on 1/28/2014).
Based on the information below, calculate the weighted average cost of capital.
Great Corporation has the following capital situation.
Debt: One thousand bonds were issued five years ago at a
coupon rate of 8%. They had 25-year terms and $1,000 face values. They are now
selling to yield 9%. The tax rate is 36%
Preferred stock:
Two thousand shares of preferred are outstanding, each of which pays an annual
dividend of $7.50. They originally sold to yield 15% of their $50 face value.
They're now selling to yield 8%.
Equity: Great Corp has
125,000 shares of common stock outstanding, currently selling at $14.48 per
share. Dividend expected for next year is $1.00 and the growth rate is 5%.
Final Answer
Europe(Continental)