What is xyzs current stock price

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Reference no: EM13260850

XYZ manufacturing company is considering a major expansion program that has been proposed by the company's information technology manufacturing group. Before proceeding with the expansion, the company must estimate its cost of capital. Assume you are the CFO of the company. Your first task is to estimate XYZ's cost of capital. Your analysts have provided you with the following data, which they believe may be relevant to your task.

Tax rate	40%
Bond info	Coupon	Semiannual payment	Years	Price
	12%		15 years	1153.72
Preferred stock	Par value	Quarterly Div	Current Price		Dividend Payout Ratio
	100	10%	111.1		.94
Common stock	Last year's Dividend	ROE	Beta	T-bond yield	Market Return Rate
	4.19	.041	1.2	7%	13%
Capital Structure	Debt	Preferred stock	Common stock
	35%	20%	45%

1. What sources of capital should be included when you estimate XYZ's WACC? Also, what is WACC a measure of?

2. What is the market interest rate on XYZ's debt and its component of after-tax cost of debt?

3. What is the firms cost of preferred stock?

4. What is XYZ's required rate of return on common equity?

5. What is XYZ's growth rate?

6. What is XYZ's current stock price?

7. What is XYZ's WACC?

Reference no: EM13260850

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