Question
Calculating Capital Structure Weights A firm has the following target capital structure with $12,312 of debt, $5,471 of preferred stock and $12,045 of equity. The
Calculating Capital Structure Weights
A firm has the following target capital structure with $12,312 of debt, $5,471 of preferred stock and $12,045 of equity. The after-tax cost of debt is 5.59%, the cost of preferred stock is 10.16% and the cost of common equity is 13.9%. The firm faces a tax rate of 40%. What will be the firms weight on equity capital?
(your answer should be in percentages so 10% would be entered as 10 or 10%)
hint: you need to first find the total amound of invested capital
Please show your work. Will rate when answer is posted, Thank you!
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