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At 2020 AAB Construction has a face debt value of [8+20]M trading at [70+4+1] %...

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Finance

At 2020 AAB Construction has a face debt value of [8+20]M trading at [70+4+1] % with a pre-tax weighted cost of [1+3] %. AAB common equity for the year was valued at [9+20+8]M and preferred equity for [8+4] M. AAB Construction issues preferred dividends at an annual rate of $6. Its current preferred stock price is $[4+8+20]. Assume that the equity beta for AAB Construction is [(8+4+2)/10]. The Yield on 10-year treasuries is 4%, and that the market risk premium for the year is 12%. The company's EPS expected growth is [(8/2) +2] %. For this year, the dividends for AAB Construction are the same for common and preferred stock; additionally, the price for common stock is $[4+25]. If the tax rate is [8+4+20] %, a) What is AAB Construction WACC if CAPM is used b) What is AAB Construction WACC if CDGM is used NOTE: Answer in percentages. If your answer is 0.0405, then answer 4.05

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