document.write( "Question 768367: bonds: currently sell for 94.94 with 13 years to maturity. annual coupon rate is 11.25% and interest rate is paid every six month. company's tax rate is 40%. \n" );
document.write( "preffered stock: the company has also issued a 6.75% preffered stock with $10.00 par value. the preffered stock is currently being traded at $6.50. \n" );
document.write( "common stock: its common stock is selling for $5.25. last dividend paid was 65 cents per share. constant growth rate is 6%. new common stock issue will attract a flotation cost of 9% per share. \n" );
document.write( "targeted capital structure: \n" );
document.write( "debt: 30%; preffered: 20% common stock equity: 50%\r \n" );
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document.write( "a) what is the WACC if the company has sufficient retained earnings to fund the equity portion of its investment? \n" );
document.write( "b)what is the company's WACC, aasuming the company has exhausted all its retained earnings and must issue new common stocks to finance its \n" );
document.write( "investment?\r \n" );
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