Question: 1. (a). Given a proposed capital structure by Midway Ground Corporation as detailed here below, what is its weighted average cost of capital (WACC)? Assume

1. (a). Given a proposed capital structure by Midway Ground Corporation

1. (a). Given a proposed capital structure by Midway Ground Corporation as detailed here below, what is its weighted average cost of capital (WACC)? Assume that the company has a marginal tax rate of 40%. (10 points) Source of Capital Capital Components Cost Long Term Debt $90,000 4.5% Preferred Stock $30,000 10.6% Common Stock $80,000 12.0% 1. (b). If the required rate of return for Midway Ground Corporation is 7%, should it accept the proposed capital structure? State why or why not (4 points)

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