Given the following information:

Percent of capital structure:

Debt 40 %
Preferred stock 20
Common equity (retained earnings) 40

Additional information:

Bond coupon rate 12%
Bond yield to maturity 10%
Dividend, expected common $ 6.00
Dividend, preferred $ 13.00
Price, common $ 65.00
Price, preferred $ 108.00
Flotation cost, preferred $ 3.50
Growth rate 5%
Corporate tax rate 40%

Calculate the Hamilton Corp.'s weighted cost of each source of capital and the weighted average cost of capital. (Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.)

18

step-by-step explanation:

ik this stuph and i am smart donkey

true

step-by-step explanation:

geometric series converge the common ratio r has magnitude less than one.

which is equivalent to

for the example we need

|2-x| < 1

-1 < 2-x   and 2-x < 1

x < 3 and x > 1

we can write that

answer: 1 < x < 3

1a. common ratio r=250/25=10 > 1     diverges

1b.   r=50/100=1/2 converges

when these converge they converge to

where a is the first term.

answer: 200

1c. r=-1   so it's not the case that |r| < 1.     diverges

2a. x is the common ratio so we converge when |x|< 1

2b.   r=-10x / -2 = 5x.

we converge when

|5x| < 1

|x| < 1/5

2c.   r=3-2x

-1 < 3-2x and 3-2x < 1

-4 < -2x and 2 < 2x

x < 2 and 1 < x

1 < x < 2

2d. [/tex] r=-48x^3/12 = 4x^3[/tex]

|4x^3| < 1

|x^3| < \frac 1 4

|x| < 4^{-1/3}