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I only need help with the answer to Weighted Average Cost of Capital (WACC) using the information provided from the previous questions, thanks.

GHI Companys current share price is $15.6 and it is expected to pay a $1.2 dividend per share next year. After that, the fir

GHI Company has existing debt issued three years ago with a coupon rate of 6%. The firm just issued new debt at par with a co

GHI Company faces a 35% tax rate. Using the correct answers from the previous parts, what is the companys WACC? Enter your a

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Answer #1

rate positively ..

Computation of WACC
Source Value Weight Cost of equity weight * cost
Equity 93600000 15.6*6000000 44.05% 11.69% 5.15%
Preferred stock 93900000 31.3*3000000 44.19% 7.99% 3.53%
Debt 25000000 11.76% 4.36% 6.7%*(1-35%) 0.51%
212500000 9.19%
Ans = 9.19%
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