Find the cost of capital for the millenial corporation

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Reference no: EM131611211

Find the cost of capital (WACC) for the Millenial corporation. We have the following information:

-10,000 bonds with a cupon rate of 4% and a price of 104.5

-The bonds have a time to maturity of 25 years, and pay the coupon semi-annually.

-25,000 shares preferred, par value $ 100, coupon 5%. Its price in the market is $ 98 at the moment.

-500,000 common shares that are currently being sold for $ 75. Beta of shares is 1.42.

-At the moment the risk free rate is 1% and the market risk premium is 7%.

-The marginal contribution rate of the company is 34%.

Reference no: EM131611211

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