Question 1 (25 pts): Given the following information for Gordon Corporation, find the WACC (weighted...
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Question 1 (25 pts): Given the following information for Gordon Corporation, find the WACC (weighted average cost of capital). Assume that the company's tax rate is 35% . Common Stock: 10 million shares outstanding, selling for $6.5 per share; the beta is 0.85. Preferred Stock: 7 million shares outstanding, selling for $5 per share, pays $1.2 annually per share. Debi: 1 million 7 % quarter coupon bonds outstanding, $100 face value, 10 years to maturity, selling at par. Market: 6% market return and 3.5% risk-free rate
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