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Business, 03.05.2021 14:50 aliviadushane

La Jolla Consulting has 500,000 common shares outstanding that are priced at $36.00 per share and have an expected return of 14.64% and an expected real return of 14.38%. The company also has 400,000 shares of preferred stock outstanding that are priced at $25.00 per share and have an expected return of 12.56% and an expected real return of 12.30%. Finally, the company has 10,000 bonds outstanding with a coupon rate of 7.69%, current yield of 6.41%, yield-to-maturity of 9.24%, face value of $1,000, and price of $1,200. The expected return on the market is 12.11%, the risk-free rate is 3.78%, and the tax rate is 20%. What is the weighted average cost of capital for La Jolla Consulting

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