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Calculating the wacc of the company

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The CFO of GHWS is calculating the WACC of the company. She collects the following facts:

  • The company's long-term bonds currently offer a yield to maturity of 8%.
  • The company's stock price is $30.3.
  • $30.3 per share and recently paid a dividend of $2 which is expected to grow at a constant rate of 6% per year.
  • The company preference shares currently trade at $41.8 per share and pay a preference dividend of 10% on a par value of $50.
  • The company's capital structure is 65% common equity, 10% preference shares, and 25% debt.
  • The company's tax rate is 40%.

What is the company's WACC?

Reference no: EM132509256

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