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Unformatted text preview: 2,000,000 Total Liabilities 2,500,000 Preferred Stock 800,000 Common Stock 1,000,000 Retained Earnings 500,000 Total Shareholder's Equity 2,300,000 Total Liabilities and Owner's Equity 4,800,000 B. Compute marginal WACC a. If the company raises fund from preferred stock not more than $300,000, cost of preferred stock is 7%. If excess, the cost is 8% b. If the company raises fund from bond not more than $1,000,000, cost of deby is 4%. If excess, the cost is 5% c. Cost of retained earning is 11% d. Cost of common stock is 12% e. Available retained earning is $400,000...
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- Spring '11
- flotation cost