Mullineaux Corporation Has a Target Capital Structure of 41 Percent

question 24

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 18 percent,the cost of preferred stock is 6.5 percent,and the pre-tax cost of debt is 8.5 percent.What is the firm's WACC given a tax rate of 39 percent?

• A)9.87 percent
• B)10.43 percent
• C)10.49 percent
• D)13.38 percent
• E)15.17 percent