Justice,Inc.has a capital structure which is based on 30 percent debt,5 percent preferred stock,and 65 percent common stock.The flotation costs are 11 percent for common stock,10 percent for preferred stock,and 7 percent for debt.The corporate tax rate is 37 percent.What is the weighted average flotation cost?
A) 8.97 percent
B) 9.48 percent
C) 9.62 percent
D) 9.75 percent
E) 10.00 percent
Correct Answer:
Verified
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