Question: R.S. Green Has 250,000 Shares Of Common Stock Outstanding At A Market Price Of $28 A Share. Next Year’s Annual Dividend Is Expected To Be $1.55 A Share. The Dividend Growth Rate Is 2 Percent. The Firm Also Has 7,500 Bonds Outstanding With A Face Value Of $1,000 Per Bond. The Bonds Carry A 7 Percent Coupon, Pay Interest Semiannually, And Mature In 7.5 …

Question: R.S. Green Has 250,000 Shares Of Common Stock Outstanding At A Market Price Of $28 A Share. Next Year’s Annual Dividend Is Expected To Be $1.55 A Share. The Dividend Growth Rate Is 2 Percent. The Firm Also Has 7,500 Bonds Outstanding With A Face Value Of $1,000 Per Bond. The Bonds Carry A 7 Percent Coupon, Pay Interest Semiannually, And Mature In 7.5 …

R.S. Green has 250,000 shares of common stock outstanding at amarket price of $28 a share. Next year’s annual dividend isexpected to be $1.55 a share. The dividend growth rate is 2percent. The firm also has 7,500 bonds outstanding with a facevalue of $1,000 per bond. The bonds carry a 7 percent coupon, payinterest semiannually, and mature in 7.5 years. The bonds areselling at 98 percent of face value. The company’s tax rate is 34percent. What is the firm’s weighted average cost of capital?

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