What is the weighted average cost of capital

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Roll Tide, Inc. has 10,000 shares of common stock outstanding at a price of $18 a share. The firm's beta is 1.3 and the market risk premium is 6.5%. The Treasury bill rate is 3.5%. There are 9,000 shares of preferred stock outstanding at a price of $22 a share; each quarterly dividend payment on preferred stock is $0.45. Roll Tide's has 400 bonds 15 year bonds which have 6 years left to maturity. They pay a coupon rate of 7% and are trading at 105% of par. The tax rate is 34 percent. What is the weighted average cost of capital for the firm?

Reference no: EM132129682

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