Justice,Inc

question 92

Multiple Choice

Justice,Inc.has a capital structure which is based on 30 percent debt,5 percent preferred stock,and 65 percent common stock.The flotation costs are 11 percent for common stock,10 percent for preferred stock,and 7 percent for debt.The corporate tax rate is 37 percent.What is the weighted average flotation cost?

• A)8.97 percent
• B)9.48 percent
• C)9.62 percent
• D)9.75 percent
• E)10.00 percent

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