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ACC - Calculate the weighted average cost of capital




Question;Calculate the weighted average cost of capital. Great corporation has the following 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%


Paper#43210 | Written in 18-Jul-2015

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