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2. (a) Given the details below, what is the weighted average cost of capital (WACC) for Middle Ground Corporation? Assume that the company has a
2. (a) Given the details below, what is the weighted average cost of capital (WACC) for Middle Ground Corporation? Assume that the company has a marginal tax rate of 40%. Source of Capital Long Term Debt Preferred Stock Common Stock Capital Components $90,000 $30,000 $80,000 Cost 4.5% 10.6% 12.0% (b) If the desired rate of return is 6.5%, should the project be accepted? Explain why or why not? 2 points
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