1.After careful analysis, Dexter Brothers has determined that its optimal capital structure is composed of the

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1.  After mindful partition, Dexter Brothers has determined that its optimal important make is victorious of the

sources and target trade prize weights shown in the subjoined table

The absorb of score is estimated to be 7.2%; the absorb of preferred hoard is estimated to be 13.5%; the absorb of retained hues is estimated to be 16.0%; and the absorb of new beggarly hoard is estimated to be 18.0%. All of these are after-tax rates. The congregation's score represents 25%, the preferred hoard represents 10%, and the beggarly hoard equity represents 65% of entirety important on the plea of the trade prizes of the three components. The congregation rely-ons to entertain a forcible total of retained hues serviceable and does not rely-on to retail any new beggarly hoard.

a. Calculate the weighted medium absorb of important on the plea of literal trade prize weights.

b. Calculate the weighted medium absorb of important on the plea of target trade prize weights.

c. Compare the answers obtained in compressiveness a and b. Explain the differences

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