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What is coco company cost of capital

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Reference no: EM133008795

Question - Coco Company has a target capital structure of 50% equity, 40% debt, and 10% preferred stock. The cost of retained earnings is 15 percent, and the cost of new equity (from selling stock) is 16.5 percent. Coco Company can sell debentures at an after-tax cost of 8.3%. Its cost of preferred stock is 11.9%. What is Coco Company's cost of capital before and after the equity break point?

Reference no: EM133008795

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