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Compute the cost of capital for the individual components

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Reference no: EM133074680

The optimum capital structure for the ?rm seems to be 40 percent debt, 10 percent preferred stock, and 50 percent common equity in the form of retained earnings.

a) Compute the cost of capital for the individual components in the capital structure.

b) Calculate the weighted average cost of capital.

Reference no: EM133074680

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