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What is the aftertax cost of debt

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Reference no: EM133163060

Question - Ninecent Corporation has a target capital structure of 75 percent common stock, 10 percent preferred stock, and 15 percent debt. Its cost of equity is 11 percent, the cost of preferred stock is 5 percent, and the pretax cost of debt is 6 percent. The relevant tax rate is 23 percent.

Required -

a. What is the company's WACC?

b. What is the aftertax cost of debt?

Reference no: EM133163060

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