What is the aftertax cost of debt and WACC

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Reference no: EM13941520

Mullineaux Corporation has a target capital structure of 64 percent common stock, 9 percent preferred stock, and 27 percent debt. Its cost of equity is 13.4 percent, the cost of preferred stock is 6.4 percent, and the cost of debt is 8.1 percent. The relevant tax rate is 40 percent.

Required:

(a) What is Mullineaux’s WACC? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

WACC %

(b) What is the aftertax cost of debt? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

Aftertax cost of debt %

Reference no: EM13941520

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