Weighted average cost of capital for firm

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A firm has 100 bonds outstanding with 10 years until maturity. The bonds pay an annual coupon, a coupon rate of 3%, a face value of $1,000, and a yield to maturity of 2.75%. Also, the firm has 50,000 shares of stock outstanding. The stock has a beta of 1.4 and a current price of $12. The risk-free rate is 1.5% and the expected return on the market is 8%. Finally, the firm has 1,000 shares of preferred stock outstanding. The preferred stock has a price of $24 and pays a $2 annual dividend. The firm's tax rate is 21%. What is the weighted average cost of capital for this firm?

Reference no: EM133114595

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