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Calculate the company weighted average cost of capital

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Reference no: EM133140387

Question - Marine plc ("the company") has 60,000 shares of preferred stock outstanding at 31 December 2021. The preferred stock has a book value of £25 per share. In addition, the company paid £75,000 in dividends to preferred shareholders in 2021. The company also has £2,000,000 of interest-bearing debt outstanding and its after-tax cost of debt capital is 6.5%. The market value of the company's common stock equity at 31 December 2021 is £6,250,000 and the company's cost of common equity capital is 8.6%.

Required - Calculate the company's weighted average cost of capital.

Reference no: EM133140387

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