Calculate Company A's cost of equity, cost of debt, and weighted average cost of capital.
Source of Capital Market Value
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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