Costello construction weighted average cost of capital

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Reference no: EM131898675

Costello Construction Inc. has an unlevered cost of equity is 13.5% with a pre-tax cost of debt of 9%. Both the book and the market value of debt is $265,000. Earnings before interest and taxes are $149,000 and the tax rate is 34%.

What is Costello Construction’s weighted average cost of capital?

(Assume there is no cost of financial distress)

Reference no: EM131898675

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