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Given the following information: 2 Percent of capital structure: 2 points Preferred stock Common equity (retained earnings) Debt 35% 45 20 Additional information: Corporate tax
Given the following information: 2 Percent of capital structure: 2 points Preferred stock Common equity (retained earnings) Debt 35% 45 20 Additional information: Corporate tax rate Dividend, preferred Dividend, expected common Price, preferred Growth rate Bond yield Flotation cost, preferred Price, common 35% $ 6.00 $ 2.50 $97.00 68 9% $10.50 $84.00 Calculate the weighted average cost of capital for Digital Processing Inc. (Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.) Notice that this problem asks for the weighted costs. These are the unweighted costs times the weights. Like this: (kd)(wd) = weighted cost of debt. Weighted Cost % Debt Preferred stock Common equity (retained earnings) Weighted average cost of capital 0.00 %
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