A firm is considering a project and plan to obtain a target capital structure with $35,761 of
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Question:
A firm is considering a project and plan to obtain a target capital structure with $35,761 of debt at a before-tax cost of 9.6%, $28,602 of preferred stock at a cost of 10.7% and $57,206 of equity at a cost of 13.5%. The firm faces a tax rate of 40%. What will be the firms weight on common equity capital? (your answer should be in percentages so 10% would be entered as 10)
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