Global Technology's capital structure is as follows:
Preferred Stock 15%
Common Stock 50%
The cost of debt is 8 percent. The tax rate is 34 percent. The cost of preferred stock is 10 percent. The beta for the common stock is 1.4. The risk free rate is 4 percent and the risk premium is 7.5 percent.
What is the WACC calculation?© BrainMass Inc. brainmass.com December 20, 2018, 2:27 am ad1c9bdddf
First let us find cost of common stock:
Cost of common stock = risk free rate +Beta*(market risk ...
Solution describes the steps for calculating WACC of a company whose capital consists of preferred stock, common stock and debt.