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Laboratorios Ramos has requested Lic. Jose Martinez, financial manager to measure the cost of each specific type of capital, as well as the weighted average

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Laboratorios Ramos has requested Lic. Jose Martinez, financial manager to measure the cost of each specific type of capital, as well as the weighted average cost of capital. The weighted average cost will be measured with a capital structure in the amount of US $800,000 using the following proportions: 35% long- term debt, 15% preferred stock, and 50% common stock equity. The company tax rate is 30%. a) Calculate the individual cost of each funding source (round to the nearest tenth percentile). Debt The company can sell 10-year bonds with a par value of $1,000 and paying annual interest at a coupon rate of 10% for $980. A float cost of 3% of par value is required in addition to the $20 bond discount. The company finances 35% with debt. ki=kd(1T)

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