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problem: Shaw Supply plans to maintain its optimal capital structure of 30 percent debt,20 percent preferred stock, and 50 percent common stock far into the future. The required return on each component is: debt 10 percent, preferred stock 11 percent, and common stock18 percent. Suppose a 40 percent marginal tax rate, determine the firm's weighted average cost of capital?

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Basic Finance, Finance

Category:- Basic Finance
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