Homework Answers
Aftertax cost of debt = Before tax cost*(1-tax
rate)
12%*(1-35%)
7.80%
Weight. Cost Weighted
cost
Debt. 23625 7.80%
1842.75
Preferred 4350 13.50%
587.25
Equity. 52275 19.20%
10036.8
Total 80250
12466.8
WACC = Weighted cost/total weight
12466.8/80250
0.1553495327 or 15.53%
So wacc is 15.53%
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The current stock price is P0 = $33.00. The last
dividend was D0 = $3.25, and it is expected to grow at a
4% constant rate. What is its cost of common equity and its WACC?
Do not round intermediate calculations. Round your answers to two
decimal...
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Problem 13-2 The Aztec Corporation has the following capital components and costs. Calculate Aztec's WACC. Round the answer to two decimal places of percentage. Do not round your intermediate calculations. Component Value Cost Debt $23625 12.0% Preferred 4350 15.0 Stock Common 52275 20.3 Equity
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