Mullineaux Corporation has a target capital structure of 65 percent common stock, 5 percent preferred stock, and 30 percent debt. Its cost of equity is 11 percent, the cost of preferred stock is 5 percent, and the pretax cost of debt is 7 percent. The relevant tax rate is 38 percent.
| a. |
What is Mullineaux's WACC? (Round your answer to 2 decimal places. (e.g., 32.16))
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| b. |
What is the aftertax cost of debt? (Round your answer to 2 decimal places. (e.g., 32.16))
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