20) Global Technologys capital structure is as follows: Debt 15 % Preferred stock 50 Common equity 35
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Question:
20)
Global Technologys capital structure is as follows: |
Debt | 15 | % |
Preferred stock | 50 | |
Common equity | 35 | |
The aftertax cost of debt is 7.50 percent; the cost of preferred stock is 11.50 percent; and the cost of common equity (in the form of retained earnings) is 14.50 percent. |
Calculate the Global Technologys weighted cost of each source of capital and the weighted average cost of capital.(Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.) |
Weighted Cost | ||
Debt (Kd) | % | |
Preferred stock (Kp) | ||
Common equity (Ke) | ||
Weighted average cost of capital (Ka) | % | |
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