Calculate the pre-tax weighted average

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1. You have collected the following information:

a. the yield on your company's preferred stock 8%

b. the yield on your company's debt 10%

c. the required return on your company's common stock and internal equity 12%

d. debt total $5,000,000

e. preferred stock current market value $10,000,000

f. common stock and retained earnings total value $20,000,000

Please calculate the pre-tax weighted average cost of capital (WACC) for your company.

2. Your company's marginal income tax rate is 40%. Please calculate the post tax WACC from the information provided in problem one.

Reference no: EM132433978

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