What is the aftertax cost of debt

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Reference no: EM131327312

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 11 percent, the cost of preferred stock is 6 percent, and the pretax cost of debt is 8 percent. The relevant tax rate is 38 percent.

a. What is the company’s WACC?

b. What is the aftertax cost of debt?

Reference no: EM131327312

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