Tencent Corporation has a target capital structure of 70 percent common stock, 5 percent preferred stock, and 25 percent

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Tencent Corporation Has A Target Capital Structure Of 70 Percent Common Stock 5 Percent Preferred Stock And 25 Percent 1 (52.21 KiB) Viewed 10 times

Tencent Corporation has a target capital structure of 70 percent common stock, 5 percent preferred stock, and 25 percent debt. Its cost of equity is 11 percent, the cost of preferred stock is 5 percent, and the pretax cost of debt is 6 percent. The relevant tax rate is 23 percent. a. What is the company's WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the aftertax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. WACC b. Cost of debt % 5.86 %