Pfd Company has debt with a yield to maturity of 7.4%, a cost of equity of 14.2%, and a cost of preferred stock of 9.4%. The market values of its debt, preferred stock, and equity are $11.5 million, $3.5 million, and $15.1 million, respectively, and its tax rate is 21%. What is this firm's after-tax WACC? Note: Assume that the firm will always be able to utilize its full interest tax shield. Pfd's WACC is __ % ? (Round to two decimal places.)
Pfd Company has debt with a yield to maturity of 7.4%, a cost of equity of 14.2%, and a cost of preferred stock of 9.4%. The market values of its debt, preferred stock, and equity are $11.5 million, $3.5 million, and $15.1 million, respectively, and its tax rate is 21%. What is this firm's after-tax WACC? Note: Assume that the firm will always be able to utilize its full interest tax shield. Pfd's WACC is __ % ? (Round to two decimal places.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Pfd Company has debt with a yield to maturity of 7.4%, a
Note: Assume that the firm will always be able to utilize its full interest tax shield.
Pfd's WACC is __ % ? (Round to two decimal places.)
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