1 percent for debt preferred stock and common stock

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Capital Co. has a capital structure, based on current market values, that consists of 45 percent debt, 17 percent preferred stock, and 38 percent common stock. If the returns required by investors are 10 percent, 11 percent, and 15 percent for the debt, preferred stock, and common stock, respectively, what is Capital's after-tax WACC? Assume that the firm's marginal tax rate is 40 percent.

Reference no: EM13476706

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