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Business, 04.05.2021 02:40 haleyblu6281

"Phillips Equipment has 80,000 bonds outstanding that are selling at par. Face value of the bonds is $1000. Bonds with similar characteristics are yielding 7.5%. The company also has 750,000 shares of 7% preferred stock (stated value=$100) and 2.5 million shares of common stock outstanding. The preferred stock sells for $65 a share. The common stock has a beta of 1.34 and sells for $42 a share. The U. S. Treasury bill is yielding 2.8% and the return on the market is 11.2%. The corporate tax rate is 38%. What is the firm's weighted average cost of capital?"

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