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...


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%



Jun 05, 2022
SOLUTION.PDF

Get Answer To This Question

Related Questions & Answers

More Questions »

Submit New Assignment

Copy and Paste Your Assignment Here