Bill's Clothing Company has a cost of debt of 7 percent, a cost of equity of 11 percent, and a cost of preferred stock of 8 percent. The firm has 104,000 shares of common stock outstanding at a market price of $20 a share. There are 40,000 shares of preferred stock outstanding at a market price of $34 a share. The bond issue has a total face value of $500,000 and now sells at 102 percent of face value (that is $1,020). The weighted average cost of capital for Bill's Clothing Company is 9.03%. What is the company's tax rate?

Answer rating: 100% (QA)

To calculate the tax rate of Bills Clothing Company we first need to determine the weights of each c... View the full answer