Find the WACC-Common stock-Market and Debt

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Reference no: EM131061216

Find the WACC for ABC Corp using the information provided below.

Common stock: 300,000 shares outstanding, selling for $30 a share. Beta is 0.85.

Preferred Stock: 50,000 shares outstanding, selling for $65 a share. The stock pays a $5 annual dividend.

Debt: 9,000 8% coupon bonds outstanding selling at 115 percent of par. Current YTM is 6.5%.

Market: 8 percent market risk premium and 2.5 percent risk free rate.

Reference no: EM131061216

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