scenario you work for an investment banking firm and have been asked by management of vestor corporation not real a software development company to calculate its weighted average cost of capital to use in evaluating a new company investment the fir

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Source of Capital	Market Value
Bonds	$10,000,000
Preferred Stock	$2,000,000
Common Stock	$8,000,000

To finance the investment, Vestor has issued 20 year bonds with a $1,000 par value, 6% coupon rate and at a market price of $950. Preferred stock paying a $2.50 annual dividend was sold for $25 per share. Common stock of Vestor is currently selling for $50 per share and has a Beta of 1.2. The firm’s tax rate is 34%. The expected market return of the S&P 500 is 13% and the 10-Year Treasury note is currently yielding 3.5%.

Determine what discount rate (WACC) Vestor should use to evaluate the warehousing facility project.

Assess whether Vestor should make the warehouse investment.

Prepare your analysis in a minimum of 700 words in Microsoft^® Word. my part is only 200 words

(my part is only 200 words and my part is (Cost of Debt))

 

 

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