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Author Question: Near-cash assets consist of marketable securities and accounts receivable. Indicate whether the ... (Read 154 times)

ARLKQ

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on: Jul 10, 2018
Near-cash assets consist of marketable securities and accounts receivable.
 
  Indicate whether the statement is true or false

Question 2

Baxter Inc has a target capital structure of 30 debt, 15 preferred stock, and 55 common equity.
 
  The company's after-tax cost of debt is 7, its cost of preferred stock is 11, its cost of retained
  earnings is 15, and its cost of new common stock is 16. The company stock has a beta of 1.5 and
  the company's marginal tax rate is 35. What is the company's weighted average cost of capital if
  retained earnings are used to fund the common equity portion?
  A) 13.80 B) 11.20 C) 12.00 D) 14.45


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Swizqar

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Reply #1 on: Jul 10, 2018
Answer to Question 1

FALSE

Answer to Question 2

C


ARLKQ

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Reply 2 on: Jul 10, 2018
YES! Correct, THANKS for helping me on my review

cici

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Reply 3 on: Yesterday
Excellent

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