Solution-Weighted average cost of capital

Weighted average cost of capital

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Reference no: EM131412097

Crescent corporation has total capital of 440 million. The ratio of debt to total capital is .35 and common stock is 40% of the total capital. Crescent corporation has outstanding preferred stock, which has paid 8% dividends consistently for the past five years. The interest on debt is 7% and the cost of common stock is 19.4%. Crescent corporation has a 38% tax rate.

What is the weighted average cost of capital for Crescent Corporation?

Reference no: EM131412097

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Weighted average cost of capital

Reference no: EM131412097

Reference no: EM131412097

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