Problemthe woodsburg co maintains a debt-asset ratio of 060, Ask an Expert

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Problem:

The Woodsburg Co. maintains a debt-asset ratio of 0.60 and has a tax rate of 35 percent. The firm does not issue preferred stock. Woodsburg's common stock is currently selling at a market price of $39.956 a share. This year, Woodsburg paid an annual dividend in the amount of $2.54 per share. The dividend growth rate is 2.25 percent. Woodsburg's outstanding bonds have a yield to maturity of 5.50%.

Required:

Question: What is Woodsburg's weighted average cost of capital?

Note: Please show how to work it out.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91167911

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