... shares, $10 par) $200 million
Preference capital, 12% (500 000 shares, $100 par) $ 50 million
Retained earnings $350 million
Debentures 14% (1 200 000 debentures, $100par) $120 million
Term loans 13% $ 80 million
$800 million
The next dividend expected per share is $2.00. The dividend per share is expected to grow at the rate of 12%. The market price per share is $50.00. Preference shares, redeemable after 10 years, is currently selling for $85.00 per share. Debentures redeemable after 5 years, are selling for $90.00 per debenture. The tax rate for the company is 30%. Calculate the average cost of capital using market value [