Question
Given the following information on Big Brothers, Inc. capital structure, compute the companys weighted average cost of capital (WACC). The companys marginal tax rate is
Given the following information on Big Brothers, Inc. capital structure, compute the companys weighted average cost of capital (WACC). The companys marginal tax rate is 40%.
Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box)
| Type of Capital | Percent of Capital Structure | Before-Tax Component Cost |
|---|---|---|
| Bonds | 60% | 11.66% |
| Preferred Stock | 20% | 15.92% |
| Common Stock | Please calculate it | 16.04% |
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Handbook Of Financial Econometrics
Authors: Yacine Ait-Sahalia, Lars Peter Hansen
1st Edition
044450897X, 978-0444508973
