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XYZ has a target capital structure of 50 percent common equity and the rest long term debt. The company's outstanding bonds have a yield to maturity of 7.9 percent. The company's common stock sells for $77.38 per share and are expected to pay a dividend of $1.28 this year. Those dividends are expected to continue to grow at a constant rate of 11.3 percent. Given its tax rate of 40 percent, what is XYZ's weighted average cost of capital? (Show your answer in decimal for to three places, e.g., 12.3% would be entered as 0.123)

MNO's capital structure includes bonds, preferred stock, and common stock. The target capital structure calls for 49 percent common stock, 18 percent preferred stock, and the remainder as bonds. The company's bonds have a yield to maturity of 6.3 percent. The company's preferred stock, which sells for $85.64 per share, pays an annual dividend of $6.57. The market risk premium for the average common stock is 13.8 percent and the risk-free rate is 2.5 percent. MNO stock has a beta of 1.8. If MNO's marginal tax rate is 40 percent, then what is MNO's weighted average cost of capital? (Show your answer in decimal for to three places, e.g., 12.3% would be entered as 0.123)

ABC's capital structure is limited to common equity and bonds. Its target capital structure calls for 61percent common equity and the rest long term debt. The company's outstanding bonds have a yield to maturity of 6.8 percent. The company's common stock, which sells for $92.97 per share, is expected to pay a dividend of $1.13 next and the dividend is expected to grow at a constant rate of 11.8 percent. Given its tax rate of 40 percent, what is ABC's weighted average cost of capital? (Show your answer in decimal for to three places, e.g., 12.3% would be entered as 0.123)

Financial Management, Finance

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