BUSN379 Given the following information
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BUSN379 Given the following information
(TCO 4) Given the following information, calculate the weighted average cost for the Han Corp.
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BUSN379 Given the following information
BUSN379 Given the following information
BUSN 379 Final Exam A+
| (TCO 4) Given the following information, calculate the weighted average cost for the Han Corp. Percent of capital structure: Preferred stock 15% Common equity 60% Debt 25%Additional information: Corporate tax rate 34% Dividend, preferred $9.50 Dividend, expected common $1.50 Price, preferred $100.00 Growth rate 9% Bond yield 6% Price, common $75.00 (Points : 40) |
WACC = ((E/V) * Re) +((E/V) * Rp) + [((D/V) * Rd)*(1-T)]
Where:
- E = Market value of the company’s equity, preferred stock or debt
- V = Total Market Value of the company (E + D); therefore…
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