Question
Cattigear Inc. has a target capital structure of 20% debt and 80% common equity and is in the 40% marginal tax rate. The corporations before-tax
Cattigear Inc. has a target capital structure of 20% debt and 80% common equity and is in the 40% marginal tax rate. The corporations before-tax cost of debt is 12% and its cost of common stock is 25%. What is the firm's WACC? Chlorostand Inc. plans to make an issue of new preferred stock. The companys existing preferred stock currently sells in the market for $216.00 per share and offers a fixed annual dividend of $16.00 per share. New issues of preferred stock would incur $24.00 per share in flotation costs. What is the companys cost of new preferred stock?
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