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Calculate the wacc

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A Company has a target capital structure of 30% debt, 20% preferred stock and 50% common equity.

The company's bonds with face value of $1000 pay a 10% coupon (semiannual), mature in 15 years, and sell for $751.82.

A company's preferred stock is selling for $60. It pays a dividend of $4.50 per year and has a perpetual life.

The company stock beta is 1.9

Risk free rate is 10% and the market risk premium is 5%

the company is a constant growth firm that just paid a dividend of $4, sells for $52 per share, and has a growth rate of 4%.

The company's marginal tax rate is 30%.

Calculate the WACC.

Reference no: EM132577816

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