The company has planned capital expenditures of 24 million, Ask an Expert

Finance

The Company has planned capital expenditures of $24 million to be financed as floows:

Debt $ 8million

Preferred Stock $4 million

Common Stock (Retained Earnings) $ 12million

The Common stock of the comapny sells for $40 per share and is expected to pay a $3 dividend in the coming year. the company's earnings, dividends and stock price are expected to grow at about 8% indefinitely. The comapny expects its bonds to yield 13.5%. The preferred stock pays 10.5% in dividends. Th corporate tax rate is 40%

What is the WACC of the company?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92718840

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