# Financial Management

Feb 3rd, 2012
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New England College of Business and Finance
Course: finance
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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%.

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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

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