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What is this company weighted average cost of capital

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Reference no: EM132869437

A company has a before-tax cost of common equity of 14%, a pre-tax cost of debt of 6%, a cost of preferred equity of 8%, and a marginal tax rate of 34%. The current market value of the company is $150 million, with $75 million common equity, $50 million debt, and $25 million preferred equity.

Problem 1: What is this company's weighted average cost of capital?

A. 6.5%
B. 7.2%
C. 8.8%
D. 9.7 %

Reference no: EM132869437

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