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Calculate Company A's cost of equity, cost of debt, and weighted average cost of capital.

Calculate Company A's cost of equity, cost of debt, and weighted average cost of capital.


Source of Capital Market Value

Bonds $10,000,000

Preferred Stock $2,000,000

Common Stock $8,000,000

-Company A has issued 20 year bonds with a $1,000 par value, 6% coupon rate and at a market price of $950.

-Preferred stock paying a $2.50 annual dividend was sold for $25 per share.

-Common stock of Company A is currently selling for $50 per share and has a Beta of 1.2.

-Company A's tax rate is 34%.

-The expected market return of the S&P 500 is 13% and the 10-Year Treasury note is currently yielding 3.5%. 

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