Weighted Average Cost of Capital Gardner, Inc., plans to finance its expansion by raising the needed investment capital from the following sources in the indicated proportions and respective capital cost rates: Capital Cost Source Bonds Preferred stock Common stock Retained earnings Proportion Rate 40% 1496 20% 10% 30% 13% 10% 10% Bonds Preferred stock Common stock Retained earnings 100% Calculate the weighted average cost of capital. Round answers to one decimal place. For example, 0.457 = 45.7%. Weighted Average Cost of Capital 96 96 96 96 96

Weighted Average Cost of Capital Gardner, Inc., plans to finance its expansion by raising the needed investment capital from the following sources in the indicated proportions and respective capital cost rates: Capital Cost Source Bonds Preferred stock Common stock Retained earnings Proportion Rate 40% 1496 20% 10% 30% 13% 10% 10% Bonds Preferred stock Common stock Retained earnings 100% Calculate the weighted average cost of capital. Round answers to one decimal place. For example, 0.457 = 45.7%. Weighted Average Cost of Capital 96 96 96 96 96

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter11: Determining The Cost Of Capital

Section: Chapter Questions

Problem 1Q: Define each of the following terms: Weighted average cost of capital, WACC; after-tax cost of debt,...

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