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Bargeron Corporation has a target capital structure of 60 percent common stock, 5 percent preferred stock, and 35 percent debt. Its cost of equity is
Bargeron Corporation has a target capital structure of 60 percent common stock, 5 percent preferred stock, and 35 percent debt. Its cost of equity is 14 percent, the cost of preferred stock is 7 percent, and the pretax cost of debt is 8.7 percent. The relevant tax rate is 35 percent. a. What is the company's WACC? WACC % b. What is the aftertax cost of debt? Aftertax cost of debt %
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