Question
I need to calculate the WACC with the following information:
Cost of debt = 7%
Cost of preferred stock is 7.5%
Cost of common stock via the CAPM = 6.8%
Cost of common stock via the DDM = 7.8%
Cost of common stock via the Earnings Multiplier Approach = 8.4%
I was told that it's not cumulative, but I'm not sure what this means. Since there's three different values for the cost of common stock, does this mean I can't solve for the WACC?
Cost of debt = 7%
Cost of preferred stock is 7.5%
Cost of common stock via the CAPM = 6.8%
Cost of common stock via the DDM = 7.8%
Cost of common stock via the Earnings Multiplier Approach = 8.4%
I was told that it's not cumulative, but I'm not sure what this means. Since there's three different values for the cost of common stock, does this mean I can't solve for the WACC?