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4 Mullineaux Corporation has a target capital structure of 70 percent common stock and 30 percent debt. Its cost of equity isYou are given the following information for Magrath Power Co. Assume the companys tax rate is 35% Debt 10,000 6.4% coupon boThe Dybvig Corporations common stock has a beta of 1.10. If the risk-free rate is 4.2 percent and the expected return on the

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Answer #1

4 Weight of common stock equity, We = 70% = 0.70 Weight of debt, Wd = 30% = 0.30 Cost of equity, Ke = 12% After-tax cost of d

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