Question
Capital structure is as follows: Debt 35%, Preferred Stock 15%, Common Equity 50%. The aftertax cost of debt is 6.5%, the cost of preferred stock
Capital structure is as follows: Debt 35%, Preferred Stock 15%, Common Equity 50%. The aftertax cost of debt is 6.5%, the cost of preferred stock is 10%, and the cost of common equity (in the form of retained earnings) is 13.5%. How do I calculate the weighted average cost of capital for each line?
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Fundamentals of Multinational Finance
Authors: Michael H. Moffett, Arthur I. Stonehill, David K. Eiteman
5th edition
205989756, 978-0205989751
