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Business, 20.08.2019 22:20 Softball6286

Baxter inc. has a target capital structure of 30% debt, 15% preferred stock, and 55% common equity. the company's after-tax cost of debt is 7%, its cost of preferred stock is 11%, its cost of retained earnings is 15%, and its cost of new common stock is 16%. the company stock has a beta of 1.5 and the company's marginal tax rate is 35%. what is the company's weighted average cost of capital if retained earnings are used to fund the common equity portion? a) 11.20%b) 12.00%c) 13.80%d) 14.45%

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Baxter inc. has a target capital structure of 30% debt, 15% preferred stock, and 55% common equity....
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