question archive Targaryen Corporation has a target capital structure of 65 percent common stock, 10 percent preferred stock, and 25 percent debt
Targaryen Corporation has a target capital structure of 65 percent common stock, 10 percent preferred stock, and 25 percent debt
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Targaryen Corporation has a target capital structure of 65 percent common stock, 10 percent preferred stock, and 25 percent debt. Its cost of equity is 9 percent, the cost of preferred stock is 4 percent, and the pretax cost of debt is 5 percent. The relevant tax rate is 21 percent. a. What is the company's WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the aftertax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) 17 % WACC b. Cost of debt %
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