Se está descargando tu SlideShare. ×

Anuncio
Anuncio
Anuncio
Anuncio
Anuncio
Anuncio
Anuncio
Anuncio
Anuncio
Anuncio
Anuncio
Cargando en…3
×

1 de 1 Anuncio

# Problem 14-9 Calculating WACC -LO3- Mullineaux Corporation has a targe.docx

Problem 14-9 Calculating WACC [LO3]
Mullineaux Corporation has a target capital structure of 65 percent common stock, 5 percent preferred stock, and 30 percent debt. Its cost of equity is 11 percent, the cost of preferred stock is 5 percent, and the pretax cost of debt is 7 percent. The relevant tax rate is 38 percent.
What is Mullineaux
Solution
a. Using the equation to calculate the WACC, we find: WACC = .65(.11) + .05(.05) + .30(.07)(1 - .38) = 0.08702 or 8.70%
b. R D = .07(1
.

Problem 14-9 Calculating WACC [LO3]
Mullineaux Corporation has a target capital structure of 65 percent common stock, 5 percent preferred stock, and 30 percent debt. Its cost of equity is 11 percent, the cost of preferred stock is 5 percent, and the pretax cost of debt is 7 percent. The relevant tax rate is 38 percent.
What is Mullineaux
Solution
a. Using the equation to calculate the WACC, we find: WACC = .65(.11) + .05(.05) + .30(.07)(1 - .38) = 0.08702 or 8.70%
b. R D = .07(1
.

Anuncio
Anuncio

Anuncio

### Problem 14-9 Calculating WACC -LO3- Mullineaux Corporation has a targe.docx

1. 1. Problem 14-9 Calculating WACC [LO3] Mullineaux Corporation has a target capital structure of 65 percent common stock, 5 percent preferred stock, and 30 percent debt. Its cost of equity is 11 percent, the cost of preferred stock is 5 percent, and the pretax cost of debt is 7 percent. The relevant tax rate is 38 percent. What is Mullineaux Mullineaux Corporation has a target capital structure of 65 percent common stock, 5 percent preferred stock, and 30 percent debt. Its cost of equity is 11 percent, the cost of preferred stock is 5 percent, and the pretax cost of debt is 7 percent. The relevant tax rate is 38 percent. Solution a. Using the equation to calculate the WACC, we find: WACC = .65(.11) + .05(.05) + .30(.07)(1 - .38) = 0.08702 or 8.70% b. R D = .07(1