Utilty Muffin Research Kitchen Inc. is financed with debt, preferred stock and c

Question

Utilty Muffin Research Kitchen Inc. is financed with debt, preferred stock and common equity. Selected information for each of the securities is provided below. Calculate the capital structure weights which would be used to calculate the weighted average cost of capital.

Long-term Debt:

$5M face value, Coupon Rate = 3.5%, Annual Coupons, Time to Maturity = 10 years, YTM = 5%

Preferred Shares

0.5M Shares Outstanding, Par Value = $10 per shre, Dividend Rate (annual) = 4%, equivalent preferred shares yield 7%.

Explanation / Answer

what do you actually need?

If you need the present value or what?

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