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Aaron's Rentals has 45,000 shares of common stock outstanding at a market price of $27 a share. The common stock just paid a $1.10 annual
Aaron's Rentals has 45,000 shares of common stock outstanding at a market price of $27 a share. The common stock just paid a $1.10 annual dividend and has a growth rate of 3.2 percent. There are 10,000 shares of 5.5 percent preferred stock outstanding at a market price of S48 share. The preferred stock has a par value of s100. The outstanding bonds mature in 11 years, have a total face value of $800,000, a face value per bond of $1,000, and a market price of each. bonds percent interest, semiannually. The tax rate is 35 percent. What is the firm's weighted average cost capital? a. 7.42 percent b. 7.61 percent c. 8.97 percent d. 9.42 percent e. 10.38 percent
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