Find the wacc for the firm

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Atlas , Ltd. has a current capital structure of 20% preferred, 50% debt, and 30% common shares. The firm's tax rate is 40%. The firm's debt consists of bonds with a 9% coupon. The current yield rate for similar bonds is 10%. The firm uses the CAPM to estimate the cost of equity in the form of retained earnings. . The risk-free rate is 4.50%, the market risk premium is 5.50%, and the stock's beta is 1.20. The firm plans to issue new preferred stock with a par value of $50 and a dividend rate of 7% of par. The preferred is selling on the market for $30 per share . Atlas must pay a flotation cost of 4% of the market price. Find the WACC for the firm

Reference no: EM132703550

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