Mullineaux Corporation has a target capital structure of 70 percent common stock, 5 percent preferred stock, and 25 percent debt. Its cost of equity is 11 percent, the cost of preferred stock is 5 percent, and the pretax cost of debt is 7 percent. The relevant tax rate is 35 percent. What is Mullineaux WACC

Mullineaux Corporation

WACC (Weighted Average Cost of Capital):

WACC = (11% of 70%) + (5% of 5%) + (7% of 25%) (1 - 35%)

= 0.077 + 0.0025 + 0.0175(65%)

= 0.09087

= 9.1%

Explanation:

Target Capital Structure:

Common stock = 70%

Preferred stock = 5%

Debt = 25%

Total = 100%

Cost of:

Equity = 11%

Preferred stock = 5%

Debt (pretax) = 7%

Tax rate = 35%

Mullineaux's WACC is the weighted average cost of its capital sources, including equity and debt.  It means that Mullineaux Corporation has to weigh each class of capital based on their capital structure weights in order to calculate the average.  This WACC therefore represents the hurdle rate which a project must meet for Mullineaux Corporation to accept or reject the project.

administrative jobs normally have someone answering phone calls and scheduling appointments, filing patient or customer information, making sure the front of the office looks nice to those who enter the building. administrative jobs can also include making sure the manager has everything they need for meetings, making delivers and much more. administrative jobs are important to most businesses as are customer service focused as they are often one of the first impressions a consumer sees of a business.

answercountries with higher real income per capita tend to have higher levels of this index.