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The Paulson Company's year - end balance sheet is shown below. Its cost of common equity is 1 6 % , its before - tax

The Paulson Company's year-end balance sheet is shown below. Its cost of common equity is 16%, its before-tax cost of debt is 10%, and its marginal tax rate is 25%. Assume that the firm long-term debt sells at par value. The firm's total debt, which is the sum of the company's short-term debt and long-term debt, equals $1,105. The firm has 576 shares of common stock outstanding that sell for $4.00 per share.
\table[[Assets,Llabilitles And Equity],[Cash,$120,Accounts payable and accruals,$10
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