Target capital structure-what is the aftertax cost of debt

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Reference no: EM13933343

Mullineaux Corporation has a target capital structure of 60 percent common stock, 15 percent preferred stock, and 25 percent debt. Its cost of equity is 10 percent, the cost of preferred stock is 4 percent, and the pretax cost of debt is 6 percent. The relevant tax rate is 35 percent.

1. What is the company’s WACC?

2. What is the aftertax cost of debt?

Reference no: EM13933343

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