The Paulson Company's year-end balance sheet is shown below. Its cost of common equity is...
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Finance
The Paulson Company's year-end balance sheet is shown below. Its cost of common equity is 17%, its before-tax cost of debt is 12%, and its marginal tax rate is 25%. Assume that the firm's long-term debt sells at par value. The firms total debt, which is the sum of the companys short-term debt and long-term debt, equals $1,120. The firm has 576 shares of common stock outstanding that sell for $4.00 per share.
Assets
Liabilities And Equity
Cash
$ 120
Accounts payable and accruals
$ 10
Accounts receivable
240
Short-term debt
60
Inventories
360
Long-term debt
1,060
Plant and equipment, net
2,160
Common equity
1,750
Total assets
$2,880
Total liabilities and equity
$2,880
Calculate Paulson's WACC using market-value weights. Do not round intermediate calculations. Round your answer to two decimal places.
%
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