Western Electric has 63,000 shares of common stock outstanding at a price per share of $70 and a rate of return of 10.2 percent. The firm has 7,100 shares of 7 percent preferred stock outstanding at a price of $80 a share. The preferred stock has a par value of $100. The outstanding debt has a total face value of $750,000 and currently sells for 96 percent of face. The yield to maturity on the debt is 11.75 percent. What is the firm's weighted average cost of capital if the tax rate is 34 percent? WACC = %
Western Electric has 63,000 shares of common stock outstanding at a price per share of $70 and a rate of return of 10.2 percent. The firm has 7,100 shares of 7 percent preferred stock outstanding at a price of $80 a share. The preferred stock has a par value of $100. The outstanding debt has a total face value of $750,000 and currently sells for 96 percent of face. The yield to maturity on the debt is 11.75 percent. What is the firm's weighted average cost of capital if the tax rate is 34 percent? WACC = %
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Western Electric has 63,000 shares of common stock outstanding at a price per share of $70 and a
WACC = %
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