Qantas is discussing new ways to recapitalise the firm and raise additional capital. Its current capital structure has a 30% weight in ordinary shares, 10% in preference shares, and 60% in debt. The cost of equity capital is 17%, the cost of preference shares is 11%, and the pre-tax cost of debt is 8%. What is the weighted average cost of capital for Qantas if its marginal tax rate is 30%?

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The Answer of Qantas is discussing new ways to recapitalise the firm and raise additional capital. Its current capital structure has a 30% weight in ordinary shares, 10% in preference shares, and 60% in debt. The cost of equity capital is 17%, the cost of preference shares is 11%, and the pre-tax cost of debt is 8%. What is the weighted average cost of capital for Qantas if its marginal tax rate is 30%?

Qantas Is Discussing New Ways to Recapitalise the Firm and Raise