5. Cletrac Tractor Corporation has 7.5 million shares of common stock outstanding, 280,000 shares of 4...

5. Cletrac Tractor Corporation has 7.5 million shares of common stock outstanding, 280,000 shares of 4 percent preferred stock outstanding, and 180,000 6 percent semiannual coupon bonds outstanding, Par value $1,000 each. The common stock currently sells for $50 per share and has a beta of 1.6, the preferred stock currently sells for $45 per share, and the bonds have 24 years to maturity and sell for 130.67 percent of par. The market risk premium is 8 percent, T-bills are yielding 3 percent and the company’s tax rate is 21 percent. a. Calculate the weights of each source of capital. (Debt, Preferred Stock and Common Stock) (10 points) b. What is the After tax cost of Debt? (10 Points) c. What is the Cost of preferred Stock (5 Points) d. What is the cost of common Stock (10 Points) e. What is Cletrac's weighted average cost of capital (WACC)

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5. Cletrac Tractor Corporation has 7.5 million shares of common stock outstanding, 280,000 shares of 4...

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