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Given the following information on Big Brothers, Inc. capital structure, compute the company’s weighted average cost of capital (WACC). The company’s marginal tax rate is 40%.

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Given the following information on Big Brothers, Inc. capital structure,

compute the company’s weighted average cost of capital (WACC). The company’s marginal tax rate is 40%.

Round the answer to two decimal places in percentage form. (Write the percentage sign in the “units” box)

Type of Capital Percent of Capital Structure Before-Tax Component Cost
Bonds 44% 14.39%
Preferred Stock 12% 17.22%
Common Stock Please calculate it 13.42%

 
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