Intro You have collected the following information about a company: Source of capital Market value Before-tax...

 

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Intro You have collected the following information about a company: Source of capital Market value Before-tax cost Long-term debt $110,000 8% Preferred stock $50,000 11% 16% for retained earnings Common equity $540,000 19% for new common stock Total $700,000 The company's total (federal plus state) marginal tax rate is 42%. Part 1 Attempt 1/3 for 10 pts. What is the weighted average cost of capital, if all common equity comes from retained earnings? 3+ decima Submit Part 2 Attempt 1/3 for 10 pts. What is the weighted average cost of capital, if all common equity comes from newly issued stock? 3+ decima Submit Intro You have collected the following information about a company: Source of capital Market value Before-tax cost Long-term debt $110,000 8% Preferred stock $50,000 11% 16% for retained earnings Common equity $540,000 19% for new common stock Total $700,000 The company's total (federal plus state) marginal tax rate is 42%. Part 1 Attempt 1/3 for 10 pts. What is the weighted average cost of capital, if all common equity comes from retained earnings? 3+ decima Submit Part 2 Attempt 1/3 for 10 pts. What is the weighted average cost of capital, if all common equity comes from newly issued stock? 3+ decima Submit