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What is the after-tax cost of debt

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Question - Peacock Corporation has a target capital structure of 70% common stock, 5% preferred stock, and 25% debt. Its cost of equity is 11%, the cost of preferred stock is 5%, and the cost of debt is 7%. The relevant tax rate is 35%.

Required -

a. What is the company's WACC?

b. What is the after-tax cost of debt?

Reference no: EM132517243

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