Question: answer asap and i will upvote Smith Co. has the following target capital structure 30% Debt 10% Preferred Stock 60% Common Stock The current average

answer asap and i will upvote answer asap and i will upvote Smith Co. has the following target

Smith Co. has the following target capital structure 30% Debt 10% Preferred Stock 60% Common Stock The current average coupon on the company's bonds with a 5 year maturity is 10% with a yield to maturity of 10.5% The company's marginal tax rate is 35% The company can issue preferred stock with a constant dividend of $3.50 per share at a price of $40 The company's common stock's beta is 1.40 The risk free rate is 3.0% The market risk premium is 6.5% What is the company's after tax cost of debt capital Select one: O a. 10.5% O b. 6.83% O c. 10% O d. 6.5%

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