Question
Wiley Computers has the following balance sheet: Bonds $150,000 Preferred shares $75,000 Common equity $450,000 The pre-tax cost of capital for bonds is 8%; cost
Wiley Computers has the following balance sheet:
Bonds $150,000 Preferred shares $75,000
Common equity $450,000
The pre-tax cost of capital for bonds is 8%; cost of capital for preferred shares is 7% and cost of capital for common equity is 9.5%. Compute the weighted average cost of capital for Wiley Computers. The tax rate is 30%. Round all calculations and answers to 2 decimals.
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The Security Risk Handbook Assess Survey Audit
Authors: Charles Swanson
1st Edition
1032030356, 978-1032030357
