(SOLVED) Turn back to University Products balance sheet from problem 16


Question Description:

$19

Turn back to University Products’ balance sheet from problem 16. If the preferred stock pays a dividend of $2 per share, the beta of the common stock is 1.5, the market risk premium is 7%, the risk-free rate is 4%, and the firm’s tax rate is 40%, what is University’s weighted-average cost of capital?

Answer

$19