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a. Total funds $100 million. 25% from bonds, 25% from preferred stock, 50% from common. Cost of each: bonds: 9%; preferred 11%, common 8%.

b. Calculate the WACC for the following:

Cost of debt (bonds): 7%; cost of common: 5%; cost of preferred: 11%. Raised $25 million from bonds, $40 million from common, and $10 million from preferred.

c. Calculate the WACC for the following:

Total capital $180 million. Bonds 80 million. Common stock 100 million. Cost of each: bonds: 11%, common stock: 7%.

d. What are the weights of each component of the following capital structure?

Total includes $100 million in bonds, $200 million in common stock, and $75 million in preferred stock.

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92749487

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