Company has a return on equity of 8.0% and pays out 35.0% of its earnings as dividends. The company is expected to pay a dividend of $2. 25 next year and the current stock price is $30.00. What is the cost of equity of company?
A 8.00%
B 15.50%
C 12.70%
D 7.50%
E 10.30%
Company has a capital structure that uses 25% preferred shares, 40% debt, and 35% common equity. The cost of preferred shares is 8.0%. The debt has a coupon rate of 8.5% and a cost of debt of 7.0%. the cost of common shares is 14.0%. the tax rate is 40%. What is the firms WACC?
A 5.82%
B 8.02%
C 8.94%
D 8.58%
E 9.70%
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