A FIRM'S BEFORE-TAX COSTS OF DEBT, PREFERRED STOCK, AND EQUITY ARE...

23. - MOCK AND SAMPLE EXAMS CFA LEVEL I MOCK EXAM MORNING VERSIONB QUESTIONS 2014 23. - MOCK AND SAMPLE EXAMS CFA LEVEL I MOCK EXAM MORNING VERSIONB QUESTIONS 2014
MOCK AND SAMPLE EXAMS CFA LEVEL I MOCK EXAM MORNING VERSIONB QUESTIONS 2014

23.

A firm's before-tax costs of debt, preferred stock, and equity are 12%, 17%, and 20% respectively. Assuming equal funding from each source and a marginal tax rate of 40%, the weighted average cost of capital (%) is closest to: A. 13.9%. B. 9.8%. 399388