overall cost of capital? :

EBK CFIN
6th Edition
ISBN:9781337671743
Author:BESLEY
Publisher:BESLEY
Chapter11: The Cost Of Capital
Section: Chapter Questions
Problem 15PROB
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The Never Better Company has a capital structure composed of 30 percent debt, 5 percent preferred stock, and 65 percent common
equity. Never Better Co.'s before-tax cost of debt is 9 percent and the cost of preferred stock is 7 percent. If the cost of common
equity is 13%, and the Company's tax bracket is at 40%, what is the company's overall cost of capital? Show your CALCULATION
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Transcribed Image Text:The Never Better Company has a capital structure composed of 30 percent debt, 5 percent preferred stock, and 65 percent common equity. Never Better Co.'s before-tax cost of debt is 9 percent and the cost of preferred stock is 7 percent. If the cost of common equity is 13%, and the Company's tax bracket is at 40%, what is the company's overall cost of capital? Show your CALCULATION استخدام المحر ر لتسق جابتك
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