Question
In: Finance
Mullineaux Corporation has a target capital structure of 75 percent common stock and 25 percent debt....
Mullineaux Corporation has a target capital structure of 75 percent common stock and 25 percent debt. Its cost of equity is 11.5 percent, and the cost of debt is 6.2 percent. The relevant tax rate is 25 percent. 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.)
Solutions
Expert Solution
Ans 9.79%
| Investment | Tax Cost | After Tax Cost | Average Cost | |
| Common Stock | 75 | 11.50% | 11.50% | 8.63 |
| Debt | 25 | 6.20% | 4.65% | 1.16 |
| 100 | Total Cost | 9.79 | ||
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