Reference no: EM133272811
Given the following information, calculate the weighted average cost of capital for Hamilton Corp. Line up the calculations in the order shown in Table 11-1. Percent of capital structure:
Debt .................................................... 35%
Preferred stock ................................ 20
Common equity ............................... 45
Additional information:
Bond coupon rate ..........................................................11%
Bond yield to maturity ................................................... 9%
Dividend, expected common ...................................... $ 5.00
Dividend, preferred ........................................................ $ 12.00
Price, common ................................................................ $ 60.00
Price, preferred ............................................................... $106.00
Flotation cost, preferred ...............................................$ 4.50
Growth rate ......................................................................6%
Corporate tax rate .......................................................... 25%