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Determine the weighted cost of capital for the Mills Company that will finance its optimal capital budget with Php120 million of long-term debt (kd = 12.5%) and Php180 million in retained earnings (ke = 16.0%). Mills’ present capital structure is considered optimal.  The company's marginal tax rate is 40%. a. 14.6% b. 12.6% c. None of these d. 14.3%

Determine the weighted cost of capital for the Mills Company that will finance its optimal capital budget with Php120 million of long-term debt (kd = 12.5%) and Php180 million in retained earnings (ke = 16.0%). Mills’ present capital structure is considered optimal.  The company's marginal tax rate is 40%. a. 14.6% b. 12.6% c. None of these d. 14.3%

Essentials Of Investments
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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Determine the weighted cost of capital for the Mills Company that will finance its optimal capital budget with Php120 million of long-term debt (kd = 12.5%) and Php180 million in retained earnings (ke = 16.0%). Mills’ present capital structure is considered optimal.  The company's marginal tax rate is 40%.

a. 14.6%

b. 12.6%
c. None of these
d. 14.3%
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