The Financing Structure of Taylor Communications Is as Follows The Overall Cost of Capital Is
A) 2

question 6

Multiple Choice

The financing structure of Taylor communications is as follows: $$\begin{array} { |l | c | c | } \hline \text { Eaurce of Capital } & \text { Propartion of Capital } & \text { Cast of Capital } \\\hline\text { Debt financing } \$ 300,000 & 30 \% & 6 \% \\\text { Preferred stack, } \$ 100,000 & 10 \% & 8 \% \\\text { Cammon stack, } \$ 400,000 & 40 \% & 12 \% \\\text { Retained earninge, } \$ 200,000 & 20 \% & 12 \% \\\hline\end{array}$$ The overall cost of capital is

• A) 2.4%
• B) 4.8%
• C) .8%
• D) 9.8%

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