Question
Ridge Tool has on its books the amounts and specific (after-tax) costs show in the following table for each source of capital. A. Calculate the
Ridge Tool has on its books the amounts and specific (after-tax) costs show in the following table for each source of capital.
A. Calculate the firms weighted average cost of capital (WACC) using book value weights.
| Source of capital | Book value | Individual cost |
| Long-term debt | $750,000 | 7.9% |
| Preferred stock | $60,000 | 9.6% |
| Common stock equity | $400,000 | 14.4% |
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The Millionaire Next Door The Surprising Secrets Of Americas Wealthy
Authors: Thomas J. Stanley, William D. Danko
1st Edition
1589795474, 978-1589795471
