Determine the weighted average cost of capital, Finance Basics

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1. The current interest rate is 6.83%. CanGo.com's stock has a beta of 2.0. Estimate the cost of equity.

2. CanGo.com has a bond with a semiannual coupon rate of 9% and 5 year maturity. Currently it is traded at $961.39. Determine the cost of debt.

3. The preferred stock of CanGo.com o§ers $1.21 annual dividend and currently is traded at $11 per share. Determine the cost of preferred stock for CanGo.com.

4. CanGo.com has the targeted capital structure of 30% debt, 60% equity, and 10% preferred stock. CanGo.comís tax rate is 30%. What is the WACC for CanGo.com's core business.


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