Cost of Preferred Stock Assignment
Wilson pharmaceutical is planning a 100 million for improvement of a brand new most cancers drug. the event might be financed with a mix of debt most well-liked fairness and customary fairness. the companies present capitol construction which considers to be optimum consists pf 30% debt 20% most well-liked fairness and 50% frequent fairness. the agency can subject bond with a price of 12% earlier than tax. the funding banker expects to promote the difficulty at its $100 par worth per inventory with a $14 annual dividend and can cost a 5% fee price. Wilson expects to make use of any frequent fairness wanted to finalize the enlargement by means of issuing new frequent inventory to the general public. Wilson expects the online proceeds from the sale of the frequent inventory to be $30 per share the agency presently pay a dividend of $three.50 per share and expects its earnings and dividends to develop 10% annual charge for the long run the companies marginal tax charge is 40% a. calculate Wilsons value of most well-liked inventory b. value of exterior fairness c. calculate wacc. Get Finance homework help at present