A Firm Is Financed with 30% Debt, 60% Common Equity

question 50

Multiple Choice

A firm is financed with 30% debt, 60% common equity and 10% preferred equity. The before-tax cost of debt is 5%, the firm's cost of common equity is 15%, and that of preferred equity is 10%. The marginal tax rate is 30%. What is the firm's weighted average cost of capital?

• A) 10.05%
• B) 11.05%
• C) 12.5%
• D) None of the above

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An amendment to the U.S. Constitution that asserts the existence of unenumerated rights retained by the people, beyond those specifically mentioned in the Constitution.

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