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The Tyler Oil Company's capital structure is as follows: 65% Debt Preferred stock Common equity 10 25 The aftertax cost of debt is 12 percent;

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The Tyler Oil Company's capital structure is as follows: 65% Debt Preferred stock Common equity 10 25 The aftertax cost of debt is 12 percent; the cost of preferred stock is 15 percent, and the cost of common equity in the form of retained earnings) is 18 percent. a-1. Calculate Tyler Oil Company's weighted average cost of capital. (Round the final answers to 2 decimal places.) Weighted Cost % Debt (Kd) Preferred stock (Kp) Common equity (ke) L Weighted average cost of capital (ka) As an alternative to the capital structure shown above for Tyler Oil Company's, an outside consultant has suggested the following modifications. Debt Preferred stock Common equity 55% 15 30 Under this new and more debt-oriented arrangement, the aftertax cost of debt is 13.8 percent, the cost of preferred stock is 13 percent, and the cost of common equity (in the form of retained earnings) is 18.8 percent. a-2. Calculate Tyler's weighted average cost of capital. (Round the final answers to 2 decimal places.) Weighted Cost Debt (kd) Preferred stock (Kp) Common equity (ke) Weighted averape rost of canital (KA)

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