Justice,Inc

Multiple Choice

Justice,Inc.has a capital structure which is based on 30 percent debt,5 percent preferred stock,and 65 percent common stock.The flotation costs are 11 percent for common stock,10 percent for preferred stock,and 7 percent for debt.The corporate tax rate is 37 percent.What is the weighted average flotation cost?

A) 8.97 percent
B) 9.48 percent
C) 9.62 percent
D) 9.75 percent
E) 10.00 percent