Target capital structure-what is the aftertax cost of debt

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Reference no: EM13944532

Mullineaux Corporation has a target capital structure of 63 percent common stock, 8 percent preferred stock, and 29 percent debt. Its cost of equity is 14.3 percent, the cost of preferred stock is 7.3 percent, and the cost of debt is 9 percent. The relevant tax rate is 38 percent.

Required:

(a) What is Mullineaux’s WACC? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

WACC %

(b) What is the aftertax cost of debt?

Reference no: EM13944532

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