The market value of Fortescue's ordinary shares, preference shares, and debt are $6 billion, $2 billion and $15 billion, respectively. Fortescue has a beta of 1.5, the market risk premium is 7%, and the risk-free rate of interest is 4%. Fortescue's preference shares pay a dividend of $3 each year and trades at a price of $27 per share. Fortescue's debt trades with a yield to maturity of 8.5%. What is Fortescue's weighted average cost of capital if its tax rate is 30%?

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The Answer of The market value of Fortescue's ordinary shares, preference shares, and debt are $6 billion, $2 billion and $15 billion, respectively. Fortescue has a beta of 1.5, the market risk premium is 7%, and the risk-free rate of interest is 4%. Fortescue's preference shares pay a dividend of $3 each year and trades at a price of $27 per share. Fortescue's debt trades with a yield to maturity of 8.5%. What is Fortescue's weighted average cost of capital if its tax rate is 30%?

The Market Value of Fortescue's Ordinary Shares, Preference Shares, and Debt