Question $26$: Mullineaux Corporation has a target capital structure of $55$ percent common stock, $10$

percent preferred stock, and $35$ percent debt. Its cost of equity is $10$ percent, the cost of

preferred stock is $5$ percent, and the pretax cost of debt is $7$ percent. The relevant tax

rate is $35$ percent.

a$.$ What is the company's WACC? $($Do not round intermediate calculations. Enter your

answer as a percent rounded to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

WACC

b$.$ What is the aftertax cost of debt? $($Do not round intermediate calculations. Enter

your answer as a percent rounded to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

Aftertax cost of

debtQuestion