The following summarized information is available for Essex Company at December 31 of the current year:

The debt of Essex has a before-tax cost rate of 12%, preferred stock has a cost of 12.3%, and common equity has a cost of 14.6%. The tax rate for Essex is 34%.
Calculate the weighted average cost of capital for Essex at December 31 of the current year.

Question

The following summarized information is available for Essex Company at December 31 of the current year:
  
The debt of Essex has a before-tax cost rate of 12%, preferred stock has a cost of 12.3%, and common equity has a cost of 14.6%. The tax rate for Essex is 34%.
Calculate the weighted average cost of capital for Essex at December 31 of the current year.

Quizplus · Accepted Answer

The Answer of The following summarized information is available for Essex Company at December 31 of the current year:
  
The debt of Essex has a before-tax cost rate of 12%, preferred stock has a cost of 12.3%, and common equity has a cost of 14.6%. The tax rate for Essex is 34%.
Calculate the weighted average cost of capital for Essex at December 31 of the current year.

The Following Summarized Information Is Available for Essex Company at December