Decide whether to invest in new line of business selling

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Reference no: EM132061961

Selma's Sushi is trying to decide whether to invest in a new line of business selling premade sushi in the refrigerated section at grocery stores. Assume that their capital structure consists of 32% common stock, 18% preferred stock, and 50% debt. Further, analysts predict that their future cost of debt will be 4% and their cost of preferred stock is 11%. We also know that the current price of common stock is $26 and that the common stock is expected to pay a $2.50 dividend each year. The firm's tax rate is 32%. What is this firm's WACC?

Reference no: EM132061961

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