How to compute firm present weighted average cost of capital

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Reference no: EM132546814

The HASF Company was recently formed to manufacture a new product it has the following capital structure in market value terms

Long term liabilities 6

Preferred stock 3

Common stock 8

Total 17

The company marginal tax rate of 40 % with interest expense per month .001 Dividend rate on 3 preferred is 9% with per value of 1000 flotation cost is 10% on per value , dividend rate on common stock is 15% with per value of 10 Market value of share is 15 with growth rate 10% .

Required

Question 1: Compute the firm present weighted average cost of capital

Reference no: EM132546814

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