What is the firm weighted average cost of capital

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The book value of Polopony Express’s debt is $31 million but is currently trading for 95% of book value, and has a coupon rate of 5% and a yield to maturity of 4.3%. The 4,760,000 shares of stock are currently trading at $62.65 per share, and the next dividend has been declared to be $8.40. Dividends are expected to grow indefinitely at 2.4%. Preferred stock has 2,400,000 shares outstanding and is currently selling for $56 per share, and pays a dividend of $4.20 per year. If the average tax rate is 20% and the marginal rate is 33%. What is the firm’s weighted average cost of capital (WACC)?

Reference no: EM132053192

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