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  1. business
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  3. baxter inc. has a target capital structure of $30

Baxter Inc. has a target capital structure of $30 million debt, $15 million preferred stock,...

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Accounting

Baxter Inc. has a target capital structure of $30 million debt, $15 million preferred stock, and $55 million common equity. The company's after-tax cost of debt
is 8%, its cost of preferred stock is 12%, its cost of retained earnings is 14%, and its cost of new common stock is 17%. The company stock has a beta of 1.5
and the company's marginal tax rate is 35%. What is the company's weighted average cost of capital if retained earnings are used to fund the common equity
portion?
O 11.90%
O 12.00%
O 12.10%
O 12.20%

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