What Is the Cost of Common Stock for Foggy Futures

question 40

Multiple Choice

What is the cost of common stock for Foggy Futures Weather Forecasters? The firm is in the 40% tax bracket.The optimal capital structure is listed below:
$$\begin{array} { | l | c | } \hline \text { Source of Capitrl } & \text { Weifht } \\\hline \text { Lang-Term Debt } & 25 \% \\\hline \text { Preferred Stack } & 2 [ 1 \% \\\hline \text { Camman Stack } & 55 \% \\\hline\end{array}$$

• A)12.25%
• B)19.75%
• C)14.97%
• D)13.22%

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