What is QM's weighted average cost of capital? A) What would be the taxes associated with this sale? B) If the old machine were sold for $40,000, what would be the taxes associated with this sale?
12-12A (Weighted average cost of capital). The target capital structure for QM Industries is 40 percent common stock, 10 percent preferred stock, and 50 percent debt. If the cost of equity for the firm is 18 percent, the cost of preferred stock is 10 percent, the before-tax cost of debt is 8 percent, and the firm's tax rate is 3