Question
Given the following information on Big Brothers, Inc. capital structure, compute the company's weighted average cost of capital (WACC). The company's marginal tax rate is 40%.
Type of Capital
|
Percent of Capital Structure
|
Before-Tax Component Cost
|
Bonds
|
55%
|
14.45%
|
Preferred Stock
|
12%
|
13.03%
|
Common Stock
|
Please calculate it
|
17.01%
|