What is company after-tax weighted average cost of capital

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Reference no: EM133135718

Question - Bulldogs Inc.'s capital structure consists of 40% long-term liabilities, 30% preferred stock, and 30% common stock. The cost of capital for each component is shown below.

Long-term liabilities 10%

Preferred stock 10%

Common stock 12%

What is the company's after-tax weighted average cost of capital if Bulldogs Inc. pays taxes at the rate of 30%?

a. 7.75%

b. 9.40%

c. 10.25%

d. 8.50%

Reference no: EM133135718

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