Determine the company wacc

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Problem - Smith Bros. has the following capital structure: They issued 300,000 shares of stock at $20. The stock just paid a dividend of $2.00 and there is an expected growth rate of 3%, the stock currently remains at a $20 price. They have also issued preferred stock with 10,000 shares at a 9% dividend for $100, that is currently selling for $95. For their debt, they issued 2,150 bonds that currently sell for 96.25%, they have a coupon rate of 7.25% and mature in 7 years. The company's tax rate is 21%. Determine the company's WACC and Show all Work to receive credit.

Reference no: EM132981397

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