Bioplex Corporation has a capital structure of 10% debt, 30% preferred stock, and 60% equity. The firm's cost of equity is 13%, cost of preferred is 9%, and the pre-tax cost of debt is 6%. If the corporate tax rate is 21%, what is the firm's cost of capital? O 11.10% O 10.97% O 10.25% O 9.80% O 8.77%

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
Section: Chapter Questions
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Bioplex Corporation has a capital structure of 10% debt, 30% preferred stock, and 60% equity. The firm's cost of
equity is 13%, cost of preferred is 9%, and the pre-tax cost of debt is 6%. If the corporate tax rate is 21%, what is the
firm's cost of capital?
O 11.10%
O 10.97%
O 10.25%
O 9.80%
O 8.77%
Transcribed Image Text:Bioplex Corporation has a capital structure of 10% debt, 30% preferred stock, and 60% equity. The firm's cost of equity is 13%, cost of preferred is 9%, and the pre-tax cost of debt is 6%. If the corporate tax rate is 21%, what is the firm's cost of capital? O 11.10% O 10.97% O 10.25% O 9.80% O 8.77%
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