Question: Mars Inc. Target Capital structure is 40 % debt and 60% Equity. If the cost debt is 9% pa before tax and the tax rate

Mars Inc. Target Capital structure is 40 % debt and 60% Equity. If the cost debt is 9% pa before tax and the tax rate is 40%. The CEO has calculated the WACC to be 9.96%.

What is the cost of Equity?

Tunney Industries is in the process of Issuing preferred stock at a price of 50/ each. The stock will pay a dividend of 3.80 per share. The floatation costs on the issue is estimated to be 5% of the price.

What is the cost of Preferred stock?

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