Given the following information:
Percent of capital structure:
Debt 10%
Preferred stock 5
Common equity (retained earnings) 85
Additional information:
Bond coupon rate 13%
Bond yield to maturity 11%
Dividend, expected common $ 7.00
Dividend, preferred $ 14.00
Price, common $ 70.00
Price, preferred $ 110.00
Flotation cost, preferred $ 2.50
Growth rate 4%
Corporate tax rate 30%
Calculate the Hamilton Corporation's weighted cost of each source of capital and the weighted average cost of capital.
Note: Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.
Weighted Cost
Debt %
Preferred stock
Common equity (retained earnings)
Weighted average cost of capital %