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= = = = 11-20. Global Greenhouse must raise $500,000 to expand operations. Global's component costs of capital are rdt = 4.0%, rps = 7%,
= = = = 11-20. Global Greenhouse must raise $500,000 to expand operations. Global's component costs of capital are rdt = 4.0%, rps = 7%, rs = 13.0%, and re = 15.5%. Global maintains a capital % structure that consists of 20 percent debt, 20 percent preferred stock, and 60 percent common equity. The firm's marginal tax rate is 40 percent. If Global expects to generate $282,000 in retained earnings this year, what marginal cost of capital will it incur to raise the needed funds? (LO 11-2)
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