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QUESTION
A company has before tax cost of common equity of 14%, a pre-tax cost of debt of 6%, cost of preferred equity of
A company has before tax cost of common equity of 14%, a pre-tax cost of debt of 6%, cost of preferred equity of
8%, and a marginal tax rate of 34%. The current market value is $150 million, with $75 million of common equity, $50 million debt, and $25 million preferred equity. What is the company's weighted average cost of capital?
