(Weighted average cost of capital) The target capital structure for QM Industries is 45% common stock, 6% preferred stock, and 49% debt. If the cost of common equity for the firm is 17.9%, the cost of preferred stock is 10.6%, the before-tax cost of debt is 8.9%, and the firm’s tax rate is 35%, what is QM’s weighted average cost of capital?
QM’s WAAC is _%?
2).(Weighted average cost of capital)Crypton Electronics has a capital structure consisting of 45% common stock and 55% debt. A debt issue of $1,000 par value, 6.1% bonds that mature in 15 years and pay annual interest will sell for $980. Common stock of the firm is currently selling for $29.76 per share and the firm expects to pay a $2.29 dividend next year. Dividends have grown at the rate of 5.3% per year and are expected to continue to do so for the foreseeable future. What is Crypton’s cost of capital where the firm’s tax rate is 30%?
Crypton’s cost of capital is _%?
3). (Weighted average cost of capital)The target capital structure for Jowers Manufacturing is 51% common stick, 18% preferred stock, and 31% debt. If the cost of common equity for the firm is 19.3%, the cost of preferred stock is 12.9% and before-tax cost of debt is 10.4%, what is Jowers’ cost of capital? The firm’s tax rate is 34%
Jowers’ WACC is _%
4).(Weighted average cost of capital) As a member of the finance Department of Ranch Manufacturing, your supervisor has asked you to compute the appropriate discount rate to use when evaluating the purchase of new packaging equipment for the plant. Under the assumption that the firm’s present structure reflects the appropriate mix of capital sources for the firm, you have determined the market value of the firm’s capital structure as follows
Source of Capital Market Values
Bonds $4,500,000
Preferred Stock $2,000,000
Common Stock $6,000,000

Ranch Manufacturing’s WAAC is _?