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first solve the questions then choice the best answers. all multiple choice questions. its just one question 9. Suppose the Widget Company has a capital
first solve the questions then choice the best answers. all multiple choice questions. its just one question
9. Suppose the Widget Company has a capital structure composed of the following, in billions: Debt $60, Common equity $40, Preferred stock $30. The debt rating is of AA. The yield on AA debt is 8%. The marginal tax rate is 20%. The preferred annual dividend is $10, current stock price is $100. If the risk-free rate is 3%, the expected market risk premium is 5%, and the company's stock beta is 1.5. What is Widget's 2 weighted average cost of capital? 1 A. 0.0825 B. 0.0830 C. 0.0935 D. 0.0912 E. 0.0849 Step by Step Solution
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