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What is the company weighted average cost of capital

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Question - Johnson Industries finances its projects with 40 percent debt, 10 percent preferred stock, and 50 percent common stock.

The company can issue bonds at a yield to maturity of 8.4 percent.

The cost of preferred stock is 9 percent.

The company's common stock currently sells for $30 a share.

The company's dividend is currently $2.00 a share (D0 = $2.00), and is expected to grow at a constant rate of 6 percent per year.

The company's tax rate is 30 percent.

Required - What is the company's weighted average cost of capital (WACC)?

Reference no: EM132530907

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