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

The debt of Eastern Valley has a before-tax cost rate of 11.5%,preferred stock has a cost of 12.1%,and common equity has a cost of 14.2%.The tax rate for Eastern Valley is 34%.
Calculate the weighted average cost of capital for Eastern Valley at December 31 of the current year.

Question

The following summarized information is available for Eastern Valley Company at December 31 of the current year:
  
The debt of Eastern Valley has a before-tax cost rate of 11.5%,preferred stock has a cost of 12.1%,and common equity has a cost of 14.2%.The tax rate for Eastern Valley is 34%.
Calculate the weighted average cost of capital for Eastern Valley at December 31 of the current year.

Quizplus · Accepted Answer

The Answer of The following summarized information is available for Eastern Valley Company at December 31 of the current year:
  
The debt of Eastern Valley has a before-tax cost rate of 11.5%,preferred stock has a cost of 12.1%,and common equity has a cost of 14.2%.The tax rate for Eastern Valley is 34%.
Calculate the weighted average cost of capital for Eastern Valley at December 31 of the current year.

The Following Summarized Information Is Available for Eastern Valley Company