Tee Corp. has a total long term capital of $980,000; of which 400,000 is long-term debt, $80,000 is preferred stock, and the rest is common equity. Its after-tax cost of debt is 4.8 percent, the cost of preferred stock is 8 percent, and the cost of common equity is 11 percent. What is Heli's WACC?
Tee Corp. has a total long term capital of $980,000; of which 400,000 is long-term debt, $80,000 is preferred stock, and the rest is common equity. Its after-tax cost of debt is 4.8 percent, the cost of preferred stock is 8 percent, and the cost of common equity is 11 percent. What is Heli's WACC?
Chapter9: The Cost Of Capital
Section9.8: The Weighted Average Cost Of Capital (wacc)
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Transcribed Image Text:1. Tee Corp. has a total long term capital of $980,000; of which 400,000 is long-term debt, $80,000
is preferred stock, and the rest is common equity. Its after-tax cost of debt is 4.8 percent, the cost
of preferred stock is 8 percent, and the cost of common equity is 11 percent. What is Heli's
WACC?
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