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Calculate the weighted average capital cost based on the following facts common stock $150,000 has been paying dividends of 15 cents on the dollar 5% preferred $15,000 bank debt $82,500 apr is 8% income tax rate is 30.5%

1. What is the weighted average cost of capital?

2. The president wants to raise more capital. the bank will only allow you to borrow up to $100,000 total. the president needs $50,000. How would you recomend you raise the capital and why?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92775966

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