What is the firm weighted average cost of capital

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Reference no: EM131924297

1. Meiston Press has a debt-equity ratio of .40. The pre-tax cost of debt is 8.30 percent and the cost of equity is 12.7 percent. What is the firm’s weighted average cost of capital (WACC) if the tax rate is 34 percent?

11.79 percent

11.42 percent

12.67 percent

10.64 percent

2. Denver Interiors has 64,000 shares of common stock outstanding at a price per share of $42. The firm also has 22,000 shares of preferred stock outstanding at a price per share of $51. There are 1,900 outstanding bonds with a face value of $1,200 and a price quote of 99.8. What is the capital structure weight of the preferred stock?

16.75 percent

18.97 percent

18.44 percent

19.26 percent

Reference no: EM131924297

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