Given the following information, calculate the WACC:
Common Stock: Constant growth dividend of 5%; Do is $4.00; Current stock price is $60.00 with 2 million shares
Preferred Stock: Dividend is $7.0; Preferred stock price is $100.00 with 400,000
Share Tax Rate: 35%
Debt: 7 percent coupon bonds with a 6.75% YTM; Bond currently sells at 95 with 100,00 bonds
a. Calculate the WACC:
b. As a CFO, what could you do (and explain) to increase the NPV for this problem?