Hello NS. Anyone here study/studied finance and would be willing to give me a few pointers please? I was given a question I need to answer. I'm comletely lost and have no idea how to answer it and thought I'd come see you for advice. Any help would be great thanks.
Example: Executive Fruit has issued debt, preferred stock and common stock. The market value of these securities are $4mil, $2mil and $6mil. The yield to maturity on their debt is 6%, the current price of preferred stock is $100 and the expected preferred stock dividend is $12. The risk free rate is 4%, the expected return on market is 12% and the Beta on common equity is 1.75. The marginal tax rate is 35%.
- Determine the the Weighted Average Cost of Capital for Executive Fruit.