You have collected the following information about a company: Before-tax cost Source of capital Long-term debt Preferred

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You Have Collected The Following Information About A Company Before Tax Cost Source Of Capital Long Term Debt Preferred 1 (60.71 KiB) Viewed 92 times

You have collected the following information about a company: Before-tax cost Source of capital Long-term debt Preferred stock Market value $130,000 $50,000 8% 11% 15% for retained earnings Common equity $480,000 18% for new common stock Total $660,000 The company's total (federal plus state) marginal tax rate is 34%. Part 1 IB Attempt 1/3 for 10 pts. What is the weighted average cost of capital, if all common equity comes from retained earnings? 3+ decimals Submit Part 2 IB Attempt 1/3 for 10 pts. What is the weighted average cost of capital, if all common equity comes from newly issued stock?