Question
Consider the following: cost of debt before taxes is 8%, the cost of equity before taxes is 6% and the cost of preferred stock before
Consider the following: cost of debt before taxes is 8%, the cost of equity before taxes is 6% and the cost of preferred stock before taxes is 10%. The tax rate is 30%. The company's captial structure is comprised fo 40% debt, 30% equity and 30% preferred stock. What is the weighted cost of capital?
| .07 | |
| .08 | |
| .06 | |
| .09 |
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Financial Markets and Institutions
Authors: Frederic S. Mishkin, Stanley G. Eakins
5th edition
321280299, 321280296, 978-0321280299
