What is the mullineux wacc

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Reference no: EM13985600

Mullineaux Corp. has a target capital structure of 70% common stock, 5% preferred stock, and 25% debt. Its cost of equity is 11%, the cost of prefered stock is 5%, and the pretax cost of debt is 7%. The relevant tax rate is 35%. What is the mullineux WACC? A) The company president has approached you about mullineaux capital structure. He wants to know why the company doesn’t use more preferred stock financing because it costs less than debt. What would you tell the president?

Reference no: EM13985600

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