Finding the WACC.
Hankins corporation has 5.4 million shares of common stock outstanding, 290,000 of 5.6 percent preferred stock outstanding, and 6.7 percent semiannual bonds outstanding, par value $1000 each. Common stock sells for $64 per share, has a beta of 1.13 preferred stock sells for $103 per share, bonds have 20 years to maturity and sell for 109 percent of par. the market risk premium is 6.8 percent, t-bills are yields 4.3 percent and firm's tax rate is 34 percent.


b. If the firm is evaluating a new investment project that has the same risk as the firm's typical project, what rate should the firm use to discount the project's cash flows?

i have re and rd
i need help to find Rp/ cost of preferred stock.

This post was edited by iCK on Dec 15 2016 08:05pm