Martin Corporation Has the Following Equity Structure Martin's Weighted Average Cost of Capital Is:
A) 9

Martin Corporation has the following equity structure: $\begin{array}{cccc}&\text { Market Value } & \text { Pretax Cost } & \text {After-Tax Cost }\\\text { Long-term debt } & \$ 300,000 & 10 \% & 6 \% \\\text { Preferred stock } & 500,000 & 10 & 10 \\\text { Common stock } & 200,000 & 15 & 15\end{array}$
Martin's weighted average cost of capital is:

A) 9.8%
B) 10.3%
C) 11.0%
D) 12.5%

Correct Answer:

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