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If Firm XYZ has the following marginal costs and proportion of funds employed, what is its weighted cost of capital? Cost Proportion Debt* 6% 0.4
If Firm XYZ has the following marginal costs and proportion of funds employed, what is its weighted cost of capital?
Cost | Proportion | |
Debt* | 6% | 0.4 |
Preferred Stock | 10% | 0.1 |
Common Equity | 15% | 0.5 |
* After tax
a. | 12.3% | |
b. | 10.3% | |
c. | 12.9% | |
d. | 10.9% |
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