Question
Marigold Company is financed by $2 million in debt, $1 million in preferred stocks, and $7 million in common stocks. The pre-tax cost of
Marigold Company is financed by $2 million in debt, $1 million in preferred stocks, and $7 million in common stocks. The pre-tax cost of debt is 4%, the cost of preferred stock is 6%, and the cost of equity is 14%. Calculate the weighted average cost of capital. Assume 21% tax rate.
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Contemporary Financial Management
Authors: James R Mcguigan, R Charles Moyer, William J Kretlow
10th Edition
978-0324289114, 0324289111
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