A company is looking to invest in new production machinery.

timer Asked: Dec 2nd, 2015

Question description

 The market value of common stock is $44 million, the market value of preferred stock is $9 million, and the market value of total debt is $33 million. Analysts have calculated the cost of common equity to be 16%, the cost of preferred equity to be 12%, and the cost of debt to be 9.5%. what is the weighted average cost of capital if the marginal tax rate is 34%? How do I calculate this?  

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