Determine the weighted average costs of capital

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Reference no: EM13810392

Sigma Company has the following capital structure: 45% debt, 15% preferred stock and 40% common stock. Determine the weighted average costs of capital given the following information. Ignore floatation costs. Assume a tax rate of 35%.

- The firm's 10-year 7% annual coupon bond is currently trading at $717.49.

-the firm’s 10% annual dividend perpetual preferred stock with a par value of $100 is trading at $71.43.

- The common stock is trading at $150. Their next dividend is expected to be $5.00. The growth rate is for casted at 10%.

Reference no: EM13810392

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