Company Z has 50,000 shares of common stock outstanding that sells for $10 per share, and its cost of common equity is 12%. The company also has 400 bonds outstanding that sell at par ($1000) and make semi-annual coupon payments of $30. Preferred stock outstanding for the company sells at $25 per share, there are 4000 shares outstanding, and the cost of the preferreds is 10%. Ignoring taxes, what is the company’s WACC?

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Company Z has 50,000 shares of common stock outstanding that sells for $10 per share, and its cost of common equity is 12%. The company also has 400 bonds outstanding that sell at par ($1000) and make semi-annual coupon payments of $30. Preferred stock outstanding for the company sells at $25 per share, there are 4000 shares outstanding, and the cost of the preferreds is 10%. Ignoring taxes, what is the company’s WACC? 

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