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What is the weighted average cost of capital

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Reference no: EM132411156

Using the following information

Debt: 25,000 bonds outstanding with a face value of $1,000. The bonds currently trade at 91% of par and have 10 years to maturity. coupon rate equals 3%, and the bonds make semi-annual interest payments.

Preferred stock: 300,000 shares of preferred stock outstanding; currently trading for $153 per share and it pays a dividend of $6.40 per share every year.

Common stock:  1,000,000 shares of common stock outstanding; currently trading for $85 per share. Beta equals 0.88.

Market and firm information: expected return on the market is 12%, the risk free rate is 3%, tax rate is 21%

What is the weighted average cost of capital. Round 4 decimal places

Reference no: EM132411156

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