James Metal Products, Inc. sells materials to contractors who construct metal warehouses, storage buildings, and...
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James Metal Products, Inc. sells materials to contractors who construct metal warehouses, storage buildings, and other structures. The firm has estimated its weighted average cost of capital to be 11.5% based on the fact that its after-tax cost of debt financing was 12 percent and its cost of equity was 11 percent. What are the firm's capital structure weights (that is, the proportions of financing that came from debt and equity)?
A. What is the proportion of debt financing?
B. What is the proportion of equity financing?
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