Business, 25.11.2019 19:31, adreyan3479
Barton industries expects that its target capital structure for raising funds in the future for its capital budget will consist of 40% debt, 5% preferred stock, and 55% common equity. note that the firm's marginal tax rate is 40%. assume that the firm's cost of debt, rd, is 6.9%, the firm's cost of preferred stock, rp, is 6.4% and the firm's cost of equity is 10.9% for old equity, rs, and 11.51% for new equity, re. what is the firm's weighted average cost of capital (wacc1) if it uses retained earnings as its source of common equity? round your answer to 3 decimal places. do not round intermediate calculations. 68.97 % what is the firm’s weighted average cost of capital (wacc2) if it has to issue new common stock? round your answer to 3 decimal places. do not round intermediate calculations.
Answers: 2
= 40% = 0.40; 
= 5% = 0.05; 
= 55% = 0.55
= 
= 6.4%
= 11.51%
+ 
x 
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