This paper circulates around the core theme of Based on the information below, calculate the weighted average cost of capital. Great Corporation has the following capital situation. together with its essential aspects. It has been reviewed and purchased by the majority of students thus, this paper is rated 4.8 out of 5 points by the students. In addition to this, the price of this paper commences from £ 45. To get this paper written from the scratch, order this assignment now. 100% confidential, 100% plagiarism-free.
Based on the information below, calculate the weighted average cost of capital.
Great Corporation has the following capital situation.
One thousand bonds were issued five years ago at a coupon rate of 10%.
They had 25-year terms and $1,000 face values. They are now selling to
yield 9%. The tax rate is 40%
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 10%.
Equity: Great Corp has 120,000
shares of common stock outstanding, currently selling at $14.48 per
share. The risk free rate is 3%, market rate of return is 10% and the
Beta is 1.2.