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Charcoal & Pastels has a capital structure with 60 percent in equity, 5 percent in preferred stock, and 35 percent in debt. Its before-tax cost
Charcoal & Pastels has a capital structure with 60 percent in equity, 5 percent in preferred stock, and 35 percent in debt. Its before-tax cost of debt is 8 percent. Its cost of equity is 18 percent and its cost of preferred stock is 12 percent. The marginal tax rate for C&P is 20 percent. Compute its weighted average cost of capital.
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