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What is the weighted average cost of capital

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A company you are researching has common stock with a beta of 1.20. Currently, Treasury bills yield 4%, and the market portfolio offers an expected return of 13%. The company finances 20% of its assets with debt that has a yield to maturity of 6%. The firm also uses preferred stock to finance 30% of its assets. The preferred stock has a current price of $10 per share and pays a level $1.00 dividend. The firm is in the 35% tax bracket. What is the weighted average cost of capital?"

  • 11.91%
  • 10.42%
  • 15.97%
  • 11.18%
  • 19.40%

Reference no: EM131317189

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