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mantparn mantparn
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7 years ago
Corporation X needs $1,000,000 and can raise this through debt at an annual rate of 10 percent, or preferred stock at an annual cost of 7 percent. If the corporation has a 40 percent tax rate, the after-tax cost of each is ________.
A) debt: $100,000; preferred stock: $70,000
B) debt: $60,000; preferred stock: $42,000
C) debt: $60,000; preferred stock: $70,000
D) debt: $100,000; preferred stock: $42,000
Textbook 
Principles of Managerial Finance

Principles of Managerial Finance


Edition: 14th
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UlainUlain
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7 years ago
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mantparn Author
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#2
7 years ago
Thanks for the assistance, I've marked your post as best answer
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