Mullineaux corporation has a target capital structure of 51


Mullineaux Corporation has a target capital structure of 51 percent common stock and 5 percent preferred stock, with the remaining percent in debt. Its cost of equity is 9 percent, the cost of preferred stock is 4 percent, and the pretax cost of debt is 8 percent. The relevant tax rate is 30 percent. What is the aftertax cost of debt?

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Financial Management: Mullineaux corporation has a target capital structure of 51
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