Locomotion Transport has a current capital structure of Long Term Debt $ 6,000,000 Preferred Stock $100,000 Common Equity $37,400,000 Locomotion needs to finance $ 7,000,000 in capital expenditures to replace aging train engines Managemer maintain the current capital mix and feels that any common equity financing will be available through incom operations at a cost of 13 The investment bank has indicated that the interest rate on a bond issue (Incluc costs) will be 8 00 Required dividends on newly issued $100 par value preferred stock will be $5 and flota 2 Its tax rate is 25 Locomotion's WACC IS Select one O a 13 00 O b 12 02 C 13 50 d 10 52 O e 8 38

Question

Locomotion Transport has a current capital structure of  Long Term Debt $ 6,000,000 Preferred Stock $100,000 Common Equity $37,400,000 Locomotion needs to finance $ 7,000,000 in capital expenditures to replace aging train engines  Managemer maintain the current capital mix and feels that any common equity financing will be available through incom operations at a cost of 13   The investment bank has indicated that the interest rate on a bond issue (Incluc costs) will be 8 00   Required dividends on newly issued $100 par value preferred stock will be $5 and flota 2   Its tax rate is 25   Locomotion's WACC IS  Select one  O a  13 00   O b  12 02 C  13 50 d  10 52 O e  8 38

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Question

Locomotion Transport has a current capital structure of: Long Term Debt $ 6,000,000 Preferred Stock $100,000 Common Equity $37,400,000 Locomotion needs to finance $ 7,000,000

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