FIN 370 Course Great Wisdom / tutorialrank.com FIN 370 Course Great Wisdom / tutorialrank.com | Page 31
Variable costs .
Fixed costs .
Operating cash flows .
Sales .
Phillips Equipment has 75,000 bonds outstanding that are selling at par . Bonds with similar characteristics are yielding 7.5 percent . The company also has 750,000 shares of 6 percent preferred stock and 2.5 million shares of common stock outstanding . The preferred stock sells for $ 64 a share . The common stock has a beta of 1.21 and sells for $ 44 a share . The U . S . Treasury bill is yielding 2.3 percent and the return on the market is 11.2 percent . The corporate tax rate is 34 percent . What is the firm ’ s weighted average cost of capital ?
11.56 percent
11.30 percent
Variable costs .
Fixed costs .
Operating cash flows .
Sales .
Phillips Equipment has 75,000 bonds outstanding that are selling at par . Bonds with similar characteristics are yielding 7.5 percent . The company also has 750,000 shares of 6 percent preferred stock and 2.5 million shares of common stock outstanding . The preferred stock sells for $ 64 a share . The common stock has a beta of 1.21 and sells for $ 44 a share . The U . S . Treasury bill is yielding 2.3 percent and the return on the market is 11.2 percent . The corporate tax rate is 34 percent . What is the firm ’ s weighted average cost of capital ?