# Calculate the firm’s weighted average cost of capital (WACC)

The current dividend for the company is \$ 50/share and is expected to grow at 3% per year in the foreseeable future. The equity shares trade at \$ 450/share. The preferred shares trade at \$ 104/share. The convertible debt has a conversion privilege of 2 shares per \$ 1 000 face value at maturity. The debt currently trades at \$ 950.
The firm’s income tax rate is 30%
Required:
2.1. Calculate the firm’s weighted average cost of capital (WACC).
2.2. Discuss the firm’s dividend payout policy and whether it has an impact on share price.
2.3. Explain why the different sources of capital have different levels of risk and return.

“WE’VE HAD A GOOD SUCCESS RATE ON THIS ASSIGNMENT. PLACE THIS ORDER OR A SIMILAR ORDER WITH HOMEWORK AIDER AND GET AN AMAZING DISCOUNT”
The post Calculate the firm’s weighted average cost of capital (WACC) appeared first on Homeworkaider.

#### What Students Are Saying About Us

.......... Customer ID: 12*** | Rating: ⭐⭐⭐⭐⭐
"Honestly, I was afraid to send my paper to you, but you proved you are a trustworthy service. My essay was done in less than a day, and I received a brilliant piece. I didn’t even believe it was my essay at first 🙂 Great job, thank you!"

.......... Customer ID: 11***| Rating: ⭐⭐⭐⭐⭐
"This company is the best there is. They saved me so many times, I cannot even keep count. Now I recommend it to all my friends, and none of them have complained about it. The writers here are excellent."