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Calculate the pre-tax weighted average cost of capital

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Reference no: EM132270543

Question - You have collected the following information:

a. The yield on your company's preferred stock 8%.

b. The yield on your company's debt 10%.

c. The required return on your company's common stock and internal equity 12%.

d. Debt total $5,000,000.

e. Preferred stock current market value $10,000,000.

f. Common stock and retained earnings total value $20,000,000.

Calculate the pre-tax weighted average cost of capital (WACC) for your company.

Your company's marginal income tax rate is 40%. Please calculate the post tax WACC from the information provided in problem one.

Reference no: EM132270543

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