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WACC

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Calculate the after-tax cost of funds and the WACC for the following:

Common Stock Preferred Stock Debt (annual coupon)

Last Dividend $3.85 $1.50 Coupon Rate 9%
Market Value $45 $13.00 Maturity 20
Growth Rate 5% Market Value $1,100.00
Flotation Costs 3% 3% Flotation Costs 3%
Weight 50% 10% Tax Rate 36%
Face Value $1,000.00
Weight 40%

Please see attached Excel file.

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Solution Summary

The solution explains how to calculate the after-tax cost of funds and the weighted average cost of capital (wacc) (see attachment).

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