Homework #6G (WACC)
Question 3 (1 point)
Garden Tools Inc. has bonds, preferred stock, and common stocks outstanding. The number of securities outstanding, the current market price, and the required rate of return for these securities are stated in the table below. The firm’s tax rate is 35%.
Calculate the firm’s WACC adjusted for taxes using the market information in the table.
Round the answers to two decimal places in percentage form. (Write the percentage sign in the “units” box)
The Number of Securities OutstandingSelling priceThe Required Rate of ReturnBonds1,310$1,17010.15%Preferred Stocks5,673$83.9715.07%Common Stocks1,026$114.1016.24%Your Answer:
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