Capital structure-weighted average cost of capital

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Reference no: EM13812296

What is the Acme Company’s weighted average cost of capital if its cost of before-tax debt is 8% (20% of overall capital structure), its cost of preferred stock is 9.5% (20% of capital structure) and is cost of internal equity is 15.5% (60% of the capital structure)? The marginal tax rate is 34%.

a. 12.3%

b. 11.7%

c. 12.8%

d. 11.8%

Reference no: EM13812296

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