Consider the following: the market value of Roxy stock is $17 a share (with 3,000,000 shares outstanding and the next annual dividend is expected to be $1.00) ,the bonds are currently selling for $1020 (semi-annual coupon payments of $25; maturing in 20 years; 20,000 bonds in the market) ,the preferred stock currently is $30 per share (paying dividends of $3 in perpetuity,100,000 shares outstanding) ; if the tax rate is 40%,what is the firm's WACC?
A) 5.76%
B) 5.23%
C) 5.88%
D) 6.91%
Correct Answer:
Verified
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