Question
The following data are available from a balance sheet: Type of Capital Total $ M Cost of Capital Debt 30 6% Preferred
| The following data are available from a balance sheet: | ||
| Type of Capital | Total $ M | Cost of Capital |
| Debt | 30 | 6% |
| Preferred stock | 10 | 8% |
| Common stock | 40 | 10% |
| Total Capital | 80 | |
a. The weighted average cost of capital (WACC), ignoring tax deductibility, using 6 decimals, is ?
b. Assume the cost of debt is now tax deductible at 30%. All other info is the same. In this case, the weighted average cost of capital WACC?
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a To calculate the weighted average cost of capital WACC without considering tax deductibilit...
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
