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Assume john corp is discussing new ways to recapitalised the firm raise additional cost. Its current capital structure has 30% weight in ordinary equity, 20%
Assume john corp is discussing new ways to recapitalised the firm raise additional cost. Its current capital structure has 30% weight in ordinary equity, 20% in preffered stock, and 50% in debt. The cost of ordinary equity is 20% the cost of preferred stock is 15% and pretax cost of debt is 10%. What is firms weighted average cost of capital if the marginal tax rate is 40%
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