What is the firms weighted average cost of capital

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The balance sheet for Stratton Co. shows $400,00 in common equity, $100,000 in preferred stock, and $500,000 in long-term debt. The company has 20,000 common shares outstanding at a market price of $65 per share. The firm's 4,000 shares of preferred stock are currently priced at $50 per share. The firm has 500 bonds outstanding selling at par value ($1,000). The company's before-tax cost of debt is 6%. The cost of common stock and preferred stock are estimated to be 10% and 7% respectively. If the firm's marginal tax rate is 40%, what is the firm's weighted average cost of capital (WACC)?

Reference no: EM13941698

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What is the firms weighted average cost of capital : The balance sheet for Stratton Co. shows $400,00 in common equity, $100,000 in preferred stock, and $500,000 in long-term debt. The company has 20,000 common shares outstanding at a market price of $65 per share. what is the firm's weighted average c..

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