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As requested, I re-submitted the question (one at a time). Sorry for the first submission. You are provided the following information on a company....

As requested, I re-submitted the question (one at a time). Sorry for the first submission.

You are provided the following information on a company. The total market value is $40 million. The capital structure, shown here, is considered to be optimal.

Acct Value Mrkt Value


Bonds,$1K par,6%coupon,6% YTM 10 million 10 million

Preferred Stock,7%,$100 par, 10 million 8 million
100,000 shares

Common Stock,$1 par, $100,000
100,000shares

Capital in excess of par $400,000

Retained Earnings $13,500,000

Total market value of common equity 22 million


What is the company's weighted average cost of capital (WACC)?

Please show me the steps to get the answer.

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Solution of 535647_FIN.doc

You are provided the following information on a company. The total market value is $40
million. The capital structure, shown here, is considered to be optimal.
Accounting Value
Market Value
Bonds,...

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