What is the percentage cost of the preferred stock

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a. The total book value of WTC's equity is $12 million, and book value per share is $24. The stock has a market-to-book ratio of 1.5, and the cost of equity is 14%. The firm's bonds have a face value of $8 million and sell at a price of 110% of face value. The yield to maturity on the bonds is 9%, and the firm's tax rate is 21%. What is the company's WACC? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

b. Pangbourne Whitchurch has preferred stock outstanding. The stock pays a dividend of $8 per share, and sells for $50. The corporate tax rate is 21%. What is the percentage cost of the preferred stock? (Enter your answer as a whole percent.)

Reference no: EM132497848

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