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BBB company has 27% debt, 16% preferred stock, 57% common equity in its capital structure. The yield to maturity on BBBs debt is 15%. The
BBB company has 27% debt, 16% preferred stock, 57% common equity in its capital structure. The yield to maturity on BBBs debt is 15%. The tax rate is 25%. The required return on preferred stock is 11%, and the required rate of return on common equity is 18%
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