Question
Jacks Pet Shop has a cost of debt of 5%, a cost of equity of 10%, and a cost of preferred stock of 7%. The
Jacks Pet Shop has a cost of debt of 5%, a cost of equity of 10%, and a cost of preferred stock of 7%. The market capitalization of the common stock is $2,000,000. Preferred stock has a total market value of $1,000,000. The bond issue has a market value of $500,000. The tax rate is 35%. What is the weighted average cost of capital for Jack's Pet Shop?
| 8.18% | ||
| 6.66% | ||
| 9.39% | ||
| 10.16% | ||
| 8.85% |
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Finance And Modernization
Authors: Gerald D. Feldman, Peter Hertner
1st Edition
0754662713, 978-0754662716
