Calculate the weighted average cost of capital for Foggy Futures Weather Forecasters.The firm is in the 25% tax bracket. The optimal capital structure is listed below:SOURCE OF CAPITAL WEIGHTDebt 20%Preferred Stock 30%Common Stock 50% DebtThe firm can issue $1000 par value, 9% coupon interest bond with a 15 year maturity date. The bond has an average discount of $20 and flotation costs of $30 per bond. The selling price is $1,000Preferred Stock The firm can sell preferred stock with a dividend that is 10% of the current price of $95. The cost of issuing and selling the stock is expected to be $7 per shareCommon Stock The firm's common stock is currently selling for $100 per share. The firm expects to pay cash dividends of $12 per share next year. The dividends have been growing at 8%. The stock was discounted by $7, and the flotation costs amounted to $5 per share.
Calculate the weighted average cost of capital
for Foggy Futures Weather Forecasters.
The firm is in the 25% tax bracket. The optimal capital structure is listed below:
SOURCE OF
CAPITAL WEIGHT
Debt 20%
Common Stock 50%
DebtThe firm can issue $1000 par value, 9% coupon interest bond with a
15 year maturity date. The bond has an average discount of $20 and
flotation costs of $30 per bond. The selling price is $1,000
Preferred Stock The firm can sell preferred stock with a dividend that is 10% of the
current price of $95. The cost of issuing and selling the stock is
expected to be $7 per share
Common Stock The firm's common stock is currently selling for $100 per share.
The firm expects to pay cash dividends of $12 per share next year.
The dividends have been growing at 8%. The stock was discounted
by $7, and the flotation costs amounted to $5 per share.
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