A rm's stockholders expect an 18% rate of return, and there are $22M in common stock and

Question:

A ﬁrm's stockholders expect an 18% rate of return, and there are $22M in and retained earnings. The firm has $9M in loans at an average rate of 8%. The firm has raised $14M by selling bonds at an average rate of 4%. What is the firm's cost of capital:
(a) Before taxes?
(b) After taxes with a tax rate of 34%?
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...