A firm has 10 million shares of common stock outstanding. The stock sells for $51.00...
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Finance
A firm has 10 million shares of common stock outstanding. The stock sells for $51.00 each. The stock just paid a dividend of $1 per share and has a dividend growth rate of 3.30%. The firm also has 500,000 bonds outstanding, with a face value of $1,000 each, a 10 year maturity and a 8.00% coupon (Payable semi-anually). The bonds sell for 84% of face value. Finally the firm has 7 million shares of 5% preferred stock outstanding which currently sell for $78.00 each and have a par value of $80. The firm pays at a corporate income tax rate of 35%.
What is the firms WACC?
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a)5.70%
b) 6.76%
c) 8.12 %
d) 4.80%
e) 4.00%
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