What is university weighted-average cost of capital

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Assets Liabilities and Net Worth Cash and short-term securities $1 Bonds, coupon = 8%, paid annually (maturity = 10 years, current yield to maturity = 9%) $10 Accounts receivable 3 Preferred stock (par value $20 per share) 2 Inventories 7 Common stock 10 Plant and equipment 21 Retained earnings 10 Total $32 Total $32 Excel Template 13-16 17. Calculating WACC. Turn back to University Products’ balance sheet from problem 16. If the preferred stock pays a dividend of $2 per share, the beta of the common stock is 1.5, the market risk premium is 7%, the risk-free rate is 4%, and the firm’s tax rate is 40%, what is University’s weighted-average cost of capital?

Reference no: EM132002433

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