Question
A corporation's balance sheet shows SAR 400 million in debt, SAR 50 million in preferred stock, and SAR 550 million in total common equity. The
A corporation's balance sheet shows SAR 400 million in debt, SAR 50 million in preferred stock, and SAR 550 million in total common equity.
The firm's tax rate 21%
Rate on Debt (Rd) Before Tax 9%
Rate on Preferred Stock (Rps) 7%
Rate on Common Stock (Rcs) 12%
What is its Weighed Average Cost of Capital (WACC)? (SAR is the Saudi Arabia Reyal)
| 6% | ||
| 7% | ||
| 8.8% | ||
| 9.8% |
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Principles Of Managerial Finance
Authors: Lawrence J. Gitman, Chad J. Zutter
13th Edition
9780132738729, 136119468, 132738724, 978-0136119463
