Question
Before Tax Cost of Debt 9.511% After-Tax Cost of Debt 9.51* (1-.40)5.71% Long-Term Debt Greater than $4500007.800Preferred Stock, All Amounts 15.08% Common Stock Equity, first
Before Tax Cost of Debt9.511%After-Tax Cost of Debt9.51* (1-.40)5.71%Long-Term Debt Greater than $4500007.800Preferred Stock, All Amounts15.08%Common Stock Equity, first $1,500,00019.00%Common Stock Equity, greater than $1,500,00021.67%
Long-Time Debt Less Than $450,001 and Common Stock Equity less than $1,500,001Type of FinancingWeight in the Capital Structure (a)Cost (b)Weighted Cost of Capital (a*b)Debt30%5.71%1.71300%Preferred Stock10%15.08%1.50800%Equity60%19%11.400%WACC14.62100%Long-Time Debt Greater Than $450,000 and Common Stock Equity less than $1,500,001Type of FinancingWeight in the Capital Structure (a)Cost (b)Weighted Cost of Capital (a*b)Debt30%7.80%2.34000%Preferred Stock10%15.08%1.50800%Equity60%19.00%11.400%WACC15.24800%Long-Time Debt Greater Than $450,000 and Common Stock Equity greater than $1,500,001Type of FinancingWeight in the Capital Structure (a)Cost (b)Weighted Cost of Capital (a*b)Debt30%7.80%2.34000%Preferred Stock10%15.08%1.50800%Equity60%21.67%13.002%WACC16.85000%
I have figured out the first parts; I just need help interpreting the data.
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