WEIGHTED AVERAGE COST OF CAPITAL
deisrahgniey30
FIN_370_WK4_Vestor_Assessment3.xlsxSheet1
| Capital Sources: | |
| Bonds | $ 10,000,000.00 |
| Preferred Stock | $ 2,000,000.00 |
| Common Stock | $ 8,000,000.00 |
| Bond details | |
| Term | 20 |
| Par Value | 1,000 |
| Coupon Rate | 6% |
| Market Price | 950 |
| Annual coupon | 60 |
| Preferred stock | |
| Sale Price | 25 |
| Annual Dividend | 2.5 |
| Common Stock | |
| Market Price | 50 |
| Beta | 1.2 |
| Tax Rate | 34% |
| S&P Return | 13% |
| 10 Year T note | 3.50% |
| Weight of debt | 50.00% |
| Weight of Equity | 40.00% |
| Weight of Preferred Shares | 10.00% |
| Cost of Debt | 6% |
| Cost of Preferred Stock | 10% |
| Cost of Equity | 14.90% |
| WACC (Discount Rate Vestor should use) | 9.09% |
Sheet2
| Capital Structure | $ Value | % |
| Debt | 10000000 | 50.00% |
| Equity | 8000000 | 40.00% |
| Preferred Stock | 2000000 | 10.00% |
| Total Capital | 20000000 | 100.00% |
