Reference no: EM132755846

Question - Given the following information, calculate the weighted average cost of capital for Puppet Corporation. Assume the funds are internally generated.

Percent of capital structure:

Debt 59%

Common equity 30%

Preferred stock 11%

Additional information:

Bond coupon rate 6%

Bond yield 5%

Bond flotation coat 3%

Dividend, common (just paid) $1.17

Price, common $46.00

Price, preferred $49.00

Dividend, preferred 7%

Flotation cost, preferred $1.99

Flotation cost, common 8%

Corporate growth rate 8%

Corporate tax rate 44%