1. Business
  2. Finance
  3. az products has 140000 shares of common stock outstanding at...

Question: az products has 140000 shares of common stock outstanding at...

Question details

AZ Products has 140,000 shares of common stock outstanding at a market price of $27 a

share. AZ Products just paid an annual dividend of $1.25 a share and the dividend growth rate is

2 percent. The company also has 2,500 bonds outstanding with a face value of $1,000 per bond.

The bonds have a pretax yield of 7.35 percent and sell at 108.2 percent of face value. The

company's tax rate is 21 percent. What is the weighted average cost of capital?

Solution by an expert tutor
Blurred Solution
This question has been solved
Subscribe to see this solution