What is the firm wacc-yellow jersey corporation

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Yellow Jersey Corporation's optimal capital structure consists of 35 % debt , 10 % preferred stock , and 55% common equity . Yellow Jersey's investors expect their earnings and dividends to grow at a constant rate of 6 % in the future . The company will issue new preferred stock at a par value of $ 150 , with the promise of a preferred dividend of $ 12 . The risk - free rate is 6 % , the market risk premium is 5% , and Yellow Jersey's beta is 1.3 Several years ago the Yellow Jersey Corp. sold a $1,000 par value, noncallable bond that now has 20 years to maturity and a 7.00% annual coupon hat is paid semiannually. The bond currently sells for $925, and the company's tax rate is 40%. What is the firm's WACC?

Reference no: EM133003057

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