Analyze tive tost0 professionais reed to address Consider the case of Turnbull Co. If its current tax rate is 40%, how much higher will Turnbull's weighted average cost of capital (WACO be if it has to raise additional common equity capital by issuing new common stock instead of raising the funds through retained earnings? Turnbull Co. has a target capital structure of 58% debt, 6% preferred stock, and 36% common equity. It has a before-tax cost of debt of 8.2%, and its cost of preferred stock is 9.3%. If Turnbull can raise all of its equity capital from retained earnings, its cost of common equity will be 12.4%. However, if it is necessary to raise new common equity it will carry a cost of 14.2%. O 0.58% 0.54% 00.64% equity, 0.50% Tunbull Co. is considering n capital by issuing $100,000 $140,000 of equity at a cost of 13.2%. The firm faces a tax rate of 40%, what will be the WACC for this project? a project that requires an initial investment of$270,000. The firm will raise the $270,000 stock at a cost of 9.9%, and of debt at a before-tax cost of 8.7%. S30,000 of preferred Consider the case of Kuhn Co. Kuhn Co. is considering a new project that will require an initial investment of $45 million. It has a target capital structure of 45% debt, 4% preferred stock, and si%common equity. Kuhn has noncallable bonds outstanding that mature in five years with a face value of $1,000, an annual coupon rate of 10%, and a market price of $1,050.76. 0 Type here to search DOLL F1 ea F3 FS F6 2 3 4 5 6 8