Question
Following is information about Sleek Pleats (SP) Corporation. The company has no preferred stock. Type of Proportion of the Type of Capital After-Tax Cost Capital
Following is information about Sleek Pleats (SP) Corporation. The company has no preferred stock. Type of Proportion of the Type of Capital After-Tax Cost Capital Capital Structure Debt, rdT 7.0% Debt 30.0% Common equity Equity 70.0 Retained earnings, rs 14.0 New issue, re 16.0 The firm expects to retain $200,000 in earnings this year to invest in capital budgeting projects. If the SP's capital budget is expected to equal $290,000, what required rate of return, or marginal cost of capital, should be used when evaluating capital budgeting projects?
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