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Business, 14.12.2019 03:31 Lingz

The brownstone corporation has 6 million shares of common stock outstanding, 600,000 shares of preferred stock that pays an annual dividend of $8, and 200,000 $1,000 par value bonds with a 10% coupon (semi-annual interest) and 20 years to maturity. at present, the common stock is selling for $50 per share, the bonds are selling for $950.62 per $1,000 of face value, and the preferred stock is selling at $74 per share.

the estimated return on the market is 13%, the risk free rate is 8%, and brownstone's beta is 1.4. assuming a tax rate is 30%, find the weighted average cost of capital. (11.96%)

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