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Author Question: The proportions of the market value of the firm's assets financed via debt, common stock, and ... (Read 79 times)

bobbysung

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Question 1

The pre-tax cost of debt is 11%, preferred stock costs 14%, and equity costs 15%. What is the weighted average cost of capital assuming a tax rate of 40% and a target capital structure of 40% debt, 20% preferred stock, and 40% equity?
◦ 10.6%
◦ 11.2%
◦ 14.0%
◦ 11.4%
◦ 12.8%

Question 2

The proportions of the market value of the firm's assets financed via debt, common stock, and preferred stock are called the firm's
◦ financing costs.
◦ portfolio weights.
◦ beta coefficients.
◦ capital structure weights.
◦ costs of capital.


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Marked as best answer by bobbysung on Apr 25, 2021

karmakat49

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bobbysung

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Reply 2 on: Apr 25, 2021
Excellent


abro1885

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Reply 3 on: Yesterday
Great answer, keep it coming :)

 

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