Today's Technology has 24,500 shares of common stock outstanding at a price per share of $64 and a rate of return of 13.75 percent. The firm has 6,550 shares of 6.30 percent preferred stock outstanding at a price of $87.50 per share. The preferred stock has a par value of $100. The outstanding debt has a total face value of $359,000 and currently sells for 103.5 percent of face. The yield to maturity on the debt is 7.63 percent. What is the firm's weighted average cost of capital if the tax rate is 35 percent?

Today's Technology has 24,500 shares of common stock outstanding at a price per share of $64 and a rate of return of 13.75 percent. The firm has 6,550 shares of 6.30 percent preferred stock outstanding at a price of $87.50 per share. The preferred stock has a par value of $100. The outstanding debt has a total face value of $359,000 and currently sells for 103.5 percent of face. The yield to maturity on the debt is 7.63 percent. What is the firm's weighted average cost of capital if the tax rate is 35 percent?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter7: Common Stock: Characteristics, Valuation, And Issuance

Section: Chapter Questions

Problem 8P

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