What is its weighted average cost of capital

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Reference no: EM131972248

MacD has two components of capital, common stock and corporate bonds.

Its capital mix is similar to that of its competitors at 5% bonds and 95% common stock. It has a 5.1% pre-tax cost of debt and a 12% cost of equity.

If MacD is in the 35% marginal tax rate, what is its weighted average cost of capital?

Reference no: EM131972248

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