kuhn does not have any retained earnings available to finance this project, so the firm will have to issue new common stock to help fund it. its common stock is currently selling for $33.35 per share, and it is expected to pay a dividend of $1.36 at the end of next year. flotation costs will represent 8% of the funds raised by issuing new common stock. the company is projected to grow at a constant rate of 9.2%, and they face a tax rate of 25%. what will be the wacc for this project? (note: round your intermediate calculations to two decimal places.) grade it now save

The weighted average cost of capital (WACC), which includes common stock, preferred stock, bonds, and other types of debt, is the average after-tax cost of capital for a company. The WACC is the typical interest rate that a business anticipates paying to finance its assets.

Because WACC expresses the return that both bondholders and shareholders require in order to provide the company with capital in a single value, it is frequently used to calculate necessary rate of return (RRR).

The model can me modified to determined the cost of equity having flotation cost as follows:

Cost of equity = D(1+r )/P(1-f) + g

d- dividend, p- price of stock , f - flotation cost , - g- growth rate

Cost of common stock for Kuhn

D(1+r) =1.36 , g- 9.2%, P= 33.35, f-8% g-9.2%

Cost of common stock = 1.36/(33.35× (1-0.08)) + 0.092= 13.404%.

To know more about WACC refer:

https://brainly.com/question/14223809

#SPJ4