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problem: A firm has estimated its cost of each source of capital & optimal capital structure, which is composed of the given sources & target market value proportions:

Source of capital

Target Market Proportions

After - Tax Cost

Long-term debt

40%

6%

Preferred stock

10

11

Common stock equity

50

15

Determine the weighted average cost of capital of the firm?

 

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M916827

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