Morgan company has a cost of debt of 6%, a cost of equity of 10%,...
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Finance
Morgan company has a cost of debt of 6%, a cost of equity of 10%, and a cost of preferred stock of 8%. The firm has 200,000 shares of common stock outstanding at a market price of $50 a share. There are 10,000 shares of preferred stock outstanding at a market price of $25 a share. The bond issue has a total face value of $1,000,000 and sells at 100% of face value. The tax rate is 25%. What is the weighted average cost of capital for Morguard?
A. 10.38%
B. 10.06%
C. 9.71%
D. 9.47%
E. 9.15%
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