A firm is thinking about expanding and wants to calculate

Reference no: EM13619982

A firm is thinking about expanding and wants to calculate their WACC. Assume that their capital structure consists of 25% common stock, 20% preferred stock, and 55% debt. Further, analysts predict that their future cost of debt will be 5%. We also know that the current price of preferred stock is $26 and that preferred stock pays a $2.00 dividend. The firm's tax rate is 25%. If the market risk premium is 6%, the risk free-rate is 2% and the stock's beta is 1.5, what is this firm's WACC?

Reference no: EM13619982

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