Weighted Average Cost of Capital Assignment

Question 18 is worth 15 points 18.Black Diamond, Inc., a manufacturer of carbon and graphite products for the aerospace and transportation industries, is considering several funding alternatives for an investment project. To finance the project, the company can sell 1,000 15-year bonds with a S1,000 face value, 7% coupon rate. The bonds require an average discount of $50 per bond and flotation costs of $40 per bond when being sold. The company can also sell 5,000 shares of preferred stock that will pay a $2 dividend per share at a price of S40 per share. The cost of issuing and selling preferred stocks is expected to be $5 per share. To calculate the cost of common stock, the company uses the dividend discount model. The firm just paid a dividend of S3 per common share. The company expects this dividend to grow at a constant rate of 3% per year indefinitely. The flotation costs for issuing new common shares are 7%. The company plans to sell 10,000 shares at a price of S50 per share. The company’s tax rate is 40%

a) Calculate the company’s after-tax cost of long-term debt

b) Calculate the Company’s cost of preferred equity

c) Calculate the company’s cost of common equity

d) Calculate the company’s weighted average cost of capital

What is the company’s weighted average cost of capital without flotation costs? Get Finance homework help today

Calculate the price
Make an order in advance and get the best price
Pages (550 words)
$0.00
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Upload your instructions
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with Australia Assessments
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
Testimonials
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Nursing
Excellent paper!
Customer 454007, June 8th, 2020
accounting
Good work.
Customer 459155, May 22nd, 2022
Psychology
GOOD REVISION.
Customer 462815, April 20th, 2022
Retail
This task was well written Looking forward to your future contribution.
Customer 463463, November 11th, 2022
Business and administrative studies
Be keen on plagiarism and grammar. Also, always follow the instructions' check-list.
Customer 453509, April 10th, 2022
Classic English Literature
Impeccable analysis.
Customer 462731, April 18th, 2022
History
Great!
Customer 453413, February 27th, 2020
Other
Good work on the spreadsheet.
Customer 459155, May 31st, 2022
Healthcare & Medical
Great work.
Customer 452441, May 11th, 2022
Management
The paper was great but it was almost 24 hours late
Customer 454067, February 21st, 2020
Education
Excellent.
Customer 452441, April 12th, 2022
Business
Excellent work. Looking forward to working with your in the future.
Customer 463467, November 11th, 2022
11,595
Customer reviews in total
96%
Current satisfaction rate
3 pages
Average paper length
37%
Customers referred by a friend
OUR GIFT TO YOU
15% OFF your first order
Use a coupon FIRST15 and enjoy expert help with any task at the most affordable price.
Claim my 15% OFF Order in Chat