Duffy Enterprises has issued common stock, preferred stock, and debt to finance its operation. The table below
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Duffy Enterprises has issued common stock, preferred stock, and debt to finance its operation. The table below shows financial information on the firm.
| 2018 Balance Sheet: | |
|---|---|
| Interest bearing debt | $630,655.00 |
| Preferred stock | $48,404.00 |
| Shareholder equity | $750,000.00 |
Duffy has publicly traded common stock that has a capitalization currently of $1,759,233.00.
An analyst has estimated that the cost of debt for Duffy is 7.00%, the cost of the preferred stock is 10.00%, and the cost of the common equity is 13.00%. Duffy has a marginal tax rate of 37.00%.
What is the cost of capital for Duffy?
Expert Answer:
Common Stock Value E 1759233 Cost of Common Stock ke 13 Debt Value Interest Bea... View the full answer
Related Book For 
Applied Statistics in Business and Economics
ISBN: 978-0073521480
4th edition
Authors: David Doane, Lori Seward
Posted Date:
