Question
accounting/economics help Sophia Inc., a luxury handbag maker in Georgia, has raised the needed capital as shown in the table below. The combined state and
accounting/economics help
Sophia Inc., a luxury handbag maker in Georgia, has raised the needed capital as shown in the table below. The combined state and federal tax rate is 26%. What is the after-tax cost of the capital for the company?
a. 7.8%
b. 9.3%
c. 10.0%
d. 6.9%
Sources of Capital Secured Loans Unsecured Loans Bonds Common Stock %Capitalization Interest rate/Dividend 20% 7% 15% 12% 25% 9% 40% 15%
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