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Question
Given the following information on S & G Inc.'s capital structure, compute the company's weighted average cost of capital.| Type of Capital | Percent of Capital Structure | Before-Tax Component Cost |
| Bonds | 40% | 7.5% |
| Preferred Stock | 5% | 11% |
| Common Stock (Internal Only) | 55% | 15% |
The company's marginal tax rate is 40%.
A) 13.3%
B) 7.1%
C) 10.6%
D) 10%
Answer
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