Calculate the weighted average cost for the ban


Given the following information, calculate the weighted average cost for the Ban Corp.

Percent of capital structure:

Preferred stock                                                      10%

Common equity                                                     70%

Debt                                                                      20%

Additional information:

Corporate tax rate                                                  34%

Dividend, preferred                                                $8.00

Dividend, expected common                                  $4.00

Price, preferred                                                      $80.00

Growth rate                                                            5%

Bond yield                                                             7%

Price, common                                                         $80.00

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Financial Management: Calculate the weighted average cost for the ban
Reference No:- TGS01109852

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