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Spacetech Is an All Equity Company with Common and Preferred

Question 196

Multiple Choice

Spacetech is an all equity company with common and preferred shares. There are 250,000 common shares outstanding. Currently the common shares have a price of $50 per share and have consistently provided a $2 per share dividend. There are 50,000 5% preferred shares outstanding, with a stock price of $90 per share. Given this information, calculated the company's WACC.


A) 8.60%
B) 7.59%
C) 6.48%
D) 5.37%
E) 4.26%

Correct Answer:

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