Given the following information

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Given the following information
(TCO 4) Given the following information, calculate the weighted average cost for the Han Corp.

 

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Given the following information

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…