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World Laundry Supplies capital structure is as follows: Debt............................ 40% Preferred stock ........... 15% Common equity.......... 45% The after-tax cost of debt is 7.0 percent;
World Laundry Supplies capital structure is as follows:
Debt............................ 40%
Preferred stock ........... 15%
Common equity.......... 45%
The after-tax cost of debt is 7.0 percent; the cost of preferred stock is 10 percent; and the cost of common equity (in the form of retained earnings) is 13.5 percent. Calculate World Laundry Supplies weighted average cost of capital.
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