Solution-Weighted average cost of capital

Weighted average cost of capital

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The Alpha Company has issued a total of 15,000,000 shares of common stock at par(its value to the firm is $15,000,000. The dividend yield is 7%. The company also has $5,000,000 of bonds(also sold at par) with a coupon rate of 5%. The tax rate for Alpha is 30%. What is its weighted average cost of capital (WACC)?

Reference no: EM131332186

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Weighted average cost of capital

Reference no: EM131332186

Reference no: EM131332186

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