question archive Given the following information, calculate the weighted average cost of capital for Puppet Corporation
Given the following information, calculate the weighted average cost of capital for Puppet Corporation
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Given the following information, calculate the weighted average cost of capital for Puppet Corporation. Assume the funds are internally generated.
Percent of capital structure:
|
Debt |
59% |
|
Common equity |
35% |
|
Preferred stock |
6% |
Additional information:
|
Bond coupon rate |
7% |
|
Bond yield |
5% |
|
Bond flotation coat |
3% |
|
Dividend, common (just paid) $ |
1.09 |
|
Price, common $ |
30.00 |
|
Price, preferred $ |
35.00 |
|
Dividend, preferred |
9% |
|
Flotation cost, preferred $ |
1.97 |
|
Flotation cost, common |
4% |
|
Corporate growth rate |
6% |
|
Corporate tax rate |
44% |
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