Mullineaux Corporation Has a Target Capital Structure of 41 Percent

question 8

Multiple Choice

Mullineaux Corporation has a target capital structure of 41 percent common stock, 4 percent preferred stock, and 55 percent debt. Its cost of equity is 19 percent, the cost of preferred stock is 6.5 percent, and the pre-tax cost of debt is 7.5 percent. What is the firm's WACC given a tax rate of 34 percent?

• A)9.87 percent
• B)10.43 percent
• C)10.77 percent
• D)13.38 percent
• E)15.17 percent

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Definitions:

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