Assume tbk will carry the same cost for each source of, Financial Management

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Assume tbk will carry the same cost for each source of

If TBK is considering a new project for $50 million. They can borrow $15 million from debt, $5 million preferred stocks, and issue the remaining in common stock. Assume TBK will carry the same cost for each source of capital, what is TBK’s cost of capital on this new project? cost of debt = 6.1%, marginal tax rate is 25%.

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