ABC Corporation has the following capital structure and costs. Amount Pre-tax Cost Bonds P 3,000,000 8% Preferred Shares Ordinary Shares 1,000,000 4,000,000 10% 15% ABC 's income is taxed at 25%. 6. Based on the given information, how much is the weight average cost of capital of ABC?

ABC Corporation has the following capital structure and costs. Amount Pre-tax Cost Bonds P 3,000,000 8% Preferred Shares Ordinary Shares 1,000,000 4,000,000 10% 15% ABC 's income is taxed at 25%. 6. Based on the given information, how much is the weight average cost of capital of ABC?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter6: Accounting For Financial Management

Section: Chapter Questions

Problem 7P

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Question

Based on the given information, how much is the weight average cost of capital of ABC?

ABC Corporation has the following capital structure and costs.
Amount
Pre-tax Cost
Bonds
P 3,000,000
8%
Preferred Shares
Ordinary Shares
ABC 's income is taxed at 25%.
1,000,000
4,000,000
10%
15%
6. Based on the given information, how much is the weight average cost of capital of ABC?

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