Question: Ebay Inc. (EBAY) has the following capital structure based on market value. Long-term debt $600 million Preferred stock 5 million shares at $1 per share

Ebay Inc. (EBAY) has the following capital structure based on market value. Long-term debt $600 million Preferred stock 5 million shares at $1 per share Common stock 30 million shares at $10 per share Costs of debt and equity are as follow: Before-tax cost of debt 9% Cost of preferred stock 8% Cost of equity 6% Tax rate 30% What is the cost of capital for Ebay? Cost of capital = __________%

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