Target capital structure-what is aftertax cost of debt

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Reference no: EM131353294

Mullineaux Corporation has a target capital structure of 56 percent common stock and 5 percent preferred stock, with the remaining percent in debt. Its cost of equity is 10 percent, the cost of preferred stock is 4 percent, and the pretax cost of debt is 6 percent. The relevant tax rate is 31 percent. What is the aftertax cost of debt?

Reference no: EM131353294

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