4 Problem 12-8 Calculating WACC (LO3] Baron Corporation has a target...
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Problem 12-8 Calculating WACC (LO3] Baron Corporation has a target capital structure of 70 percent common stock, 10 percent preferred stock, and 20 percent debt Its cost of equity is 12 percent, the cost of preferred stock is 5 percent, and the pretax cost of debt is 6 percent. The relevant tax rate is 24 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.) a. WACC b. Aftertax cost of debt % %
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