A firm's capital structure for its common stock, preferred stock and debt (bond) is 20%,...
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Finance
A firm's capital structure for its common stock, preferred stock and debt (bond) is 20%, 40% and 40% respectively. The firm's beta is .91. The risk-free rate is 4.76% and the expected return on the market is 8.30%. The firm recently paid a $4.32 preferred stock dividend per share while its price is $95 per share. The firm's 4.25% coupon bond issue trades at par and matures in 25 years. The firm's tax rate is 21%. What is the Cost of the Common Stock?
12.31%
7.98%
8.30%
3.22%
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