EBK FOUNDATIONS OF FINANCE
EBK FOUNDATIONS OF FINANCE
10th Edition
ISBN: 9780135160473
Author: KEOWN
Publisher: PEARSON CO
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Chapter 9, Problem 14SP

(Capital structure weights) Wingate Metal Products, Inc. sells materials to contractors who construct metal warehouses, storage buildings, and other structures. The firm has estimated its weighted average cost of capital to be 9.0 percent based on the fact that its after-tax cost of debt financing was 7 percent and its cost of equity was 12 percent. What are the firm’s capital structure weights (that is, the proportions of financing that came from debt and equity)?

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