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What is a weighted average cost of capital for this firm, with a 50% tax rate: Long-term debt $500,000 Preferred Stock $20,000 Common stock $600,000
What is a weighted average cost of capital for this firm, with a 50% tax rate: Long-term debt $500,000 Preferred Stock $20,000 Common stock $600,000 Assume: The market cost of debt is 10.24%. The market price of a preferred stock which pays a $1 dividend annually has a market price $12. The risk-free rate is 5.5%, and the expected return on the market portfolio is 12.5%. What is the cost of equity for a firm with a beta equal to 1.5? (just use the CAPM for the cost of equity)
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