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Sources of capital
Component costs
WACC
10-1
10-2
10-5
10-6
INPUTS
30
N
OUTPUT
I/YR
-1153.72
60
1000
PV
PMT
FV
5
10-7
10-10
preferred dividend.
10-11
10-14
DCF:
rs = (D1 / P0) + g
Own-Bond-Yield-Plus-Risk-Premium:
rs = rd + RP
10-15
10-16
10-19
Estimate
14.2%
13.8%
14.0%
14.0%
10-21
D0 (1 g)
re
g
P0 (1- F)
$4.19(1.05
)
5.0%
$50(1- 0.15)
$4.3995
5.0%
$42.50
15.4%
10-23
Flotation costs
10-25
10-26