What is the companys weighted average cost of capital

Reference no: EM13264450

A company has the following capital structure:

Target weightings: 30% debt, 20% preferred stock, 50% common equity.
Tax Rate: 35%
The firm can issue $1,000 face value, 7% semi-annual coupon debt with a 15-year maturity for a price of $1,047.46.
An 8% dividend preferred stock issue has a value of $35 per share.
The company's growth rate is estimated at 6%.
The company's common shares have a value of $40 and a dividend in year 0 of D_o = $3.00.

What is the company's weighted average cost of capital?

Reference no: EM13264450

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