ACCOUNTING-Calculating the WACC. Calculate the WACC for the following firm.

QUESTION

2. Calculating the WACC. Calculate the WACC for the following firm.Debt: 3,000 bonds with a 6% coupon rate and a quoted price of 94.5. The bonds have 20 years to maturity.Common stock: 130,000 shares of common stock. The dividends have a growth rate of 5%, the current price is $40, and the dividend next year will be $3.00. The beta of the stock is 0.9Preferred stock: 10,000 shares of 6% preferred with a current price of $80.Market: The corporate tax rate is 35%, the expected return on the market is 13%, and the risk-free rate is 7%.

ANSWER:

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