Weighted average cost of capital for chelmsford innovation

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Reference no: EM131579189

Chelmsford Innovation has a cost of debt of 5%, a cost of equity of 10%, and a cost of preferred stock of 8%. The firm has 150,000 shares of common stock outstanding at a market price of $30 a share. There are 30,000 shares of preferred stock outstanding at a market price of $25 a share. The bond issue has a total face value of $400,000 and sells at 102% of face value. The tax rate is 34%. What is the weighted average cost of capital for Chelmsford Innovation?

a) 9.25%

b) 9.47%

c) 9.61%

d) 9.84%

e) 10.05%

Reference no: EM131579189

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