Calculate company weighted average cost of capital

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Reference no: EM131566082

Corporation (not real) has a targeted capital structure of 40% long term debt and 60% common stock. The debt is yielding 6% and the corporate tax rate is 35%. The common stock is trading at $50 per share and next year's dividend is $2.50 per share that is growing by 4% per year. Calculate the company's weighted average cost of capital. Use the dividend discount model.

Reference no: EM131566082

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