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finance

Wilson Corporation (not real) has a targeted capital structure of 40% long term debt and 60% common stock. The debt is yielding 6% and the corporate tax rate is 35%. The common stock is trading at $50 per share and next year's dividend is $2.50 per share that is growing by 4% per year.

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wahidhaq
wahidhaq
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*********** ** cost of ****** **************** Discount Model) *** ********* dividend *** ***** * ***** *** ***** ** ****** + ****** ***** (250 * 50) * **** 005 * **** *** ie * ************ of cost ** ***** * * ** * **** * * * *** = *** ************ of ******** ******* **** ** ******** ****** ** **** * **** of **** * Weight ** ****** * **** ** equity= *** * *** * 060 * ** *** + **** 696 ******* ** ****** ** *** capital structure:- Debt * ** * *** Equity = ** * ****** ** *** ************ ******** ******* **** ** ******* = Weight of **** * **** of debt + ****** of ****** * Cost of equity= 060 * *** * *** * ** *** * **** *** ********************* ******* cost ** ************ * ** * *** ****** * ** ***** ********* ******* **** ** ************ = 60 * *** Equity = ** ***** %Weighted average **** ** capitalfall / ******** from *** % to 594 * **** the increase ** ********** ** **** *** * earlier ** 60 * **** ** *** capital structure ** *******

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sarahk
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***** find attached ********

Click here to download attached files: capital structure solution.docx
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