1) Assume a company has 30,000 shares of common stock outstanding at the market price of $15.00 a share. This stock was originally issued at $31 per share. Firm also has bond issue outstanding with total face value of= $280,000 which is selling for= 86% of par. Cost of equity is 13% while after tax cost of debt is 6.9%. The firm has beta of 1.48 and tax rate of 30%. Determine the weighted average cost of capital?
2) The Dunning Co. requires to increase $66.7 million to finance its expansion into new markets. Company will sell new shares of equity via general cash offering to elevate the required funds. Offer price is $67 per share and company’s underpreparers charge a spread of 8.5%. The SEC filing fee and connected administrative expenses of offering are $467,000. find out the weighted average cost of capita