GIVEN:
Bond nterest Rate = 10%
Tax Rate = 40%
Issue Price Common Stock = $60
Common Float = $4
Expected Common Dividend = $5.60
Issue Price Preferred Stock = $85
Preferred Dividend = $12
Preferred Float = $5
Earnings Growth = 4%
USING BALANCE SHEET IN NOTES, COMPUTE
A) The Cost of each financing source (show work) and then
B) Prepare ‘table’ to compute WACC.