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What is the weighted average cost of capital

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Question - Sam's Souvenir Shop has a cost of debt of 8 percent, a cost of equity of 12 percent, and a cost of preferred stock of 9 percent. The firm has 116,000 shares of common stock outstanding at a market price of $24 a share. There are 51,000 shares of preferred stock outstanding at a market price of $38 a share. The bond issue has a face value of $900,000 and a market quote of 105. The company's tax rate is 35 percent. What is the weighted average cost of capital for Sam's Souvenir Shop?

Reference no: EM132610337

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