A firm, with a 20% tax rate, has determined its cost of each source of...
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A firm, with a 20% tax rate, has determined its cost of each source of capital and optimal capital structure, which is composed of the following sources and target proportions: Source Weight Pre-Tax Cost Debt .40 9% Common Stock .50 14% Preferred Stock .10 8% The weighted average cost of capital is 11.9% 10.7% 12.1% O 11.5%
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