Question
A company has the following target capital structure and costs: Capital structure Cost of capital Debt 30% 10% Common stock 60% 12% Preferred stock 10%
A company has the following target capital structure and costs:
|
| Capital structure | Cost of capital |
| Debt | 30% | 10% |
| Common stock | 60% | 12% |
| Preferred stock | 10% | 10% |
The company's marginal tax rate is 30%. What is the company's weighted-average cost of capital?
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Managerial Accounting
Authors: Ray Garrison, Eric Noreen, Peter Brewer
16th edition
1259307417, 978-1260153132, 1260153134, 978-1259307416
