Determine the weighted cost of capital for the Mills Company that will finance its optimal capital budget with Php120 million of long-term debt (kd = 12.5%) and Php180 million in retained earnings (ke = 16.0%). Mills’ present capital structure is considered optimal. The company's marginal tax rate is 40%. a. 14.6% b. 12.6% c. None of these d. 14.3%

Determine the weighted cost of capital for the Mills Company that will finance its optimal capital budget with Php120 million of long-term debt (kd = 12.5%) and Php180 million in retained earnings (ke = 16.0%). Mills’ present capital structure is considered optimal. The company's marginal tax rate is 40%. a. 14.6% b. 12.6% c. None of these d. 14.3%

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 11P

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