ABC Corporation has the following capital structure and costs. Amount Pre-tax Cost Bonds P 3,000,000 8% Preferred Shares Ordinary Shares 1,000,000 4,000,000 10% 15% ABC 's income is taxed at 25%. 6. Based on the given information, how much is the weight average cost of capital of ABC?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Based on the given information, how much is the weight average cost of capital of ABC?

ABC Corporation has the following capital structure and costs.
Amount
Pre-tax Cost
Bonds
P 3,000,000
8%
Preferred Shares
Ordinary Shares
ABC 's income is taxed at 25%.
1,000,000
4,000,000
10%
15%
6. Based on the given information, how much is the weight average cost of capital of ABC?
Transcribed Image Text:ABC Corporation has the following capital structure and costs. Amount Pre-tax Cost Bonds P 3,000,000 8% Preferred Shares Ordinary Shares ABC 's income is taxed at 25%. 1,000,000 4,000,000 10% 15% 6. Based on the given information, how much is the weight average cost of capital of ABC?
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