Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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CostaCap Corporation's capital structure (market value weights) consists of 50% common stock, 10% preferred stock, and 40% debt.  The company's cost of common equity is 8%, it's cost of preferred equity is 5%, and it's pretax cost of debt is 3%.  Costacap's tax rate is 25%.  What is Costacap's weighted average cost of capital (WACC)?

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4.8%
5.1%
5.4%
5.7%
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