Assuming a target capital structure

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Reference no: EM13921396

Assuming a target capital structure of:

40% debt

20% preferred stock

40% common equity

What would be the WACC given the following: all debt will be from the sale of bonds with a coupon of 10% (assume no flotation costs), preferred stock's associated cost will be 13%, and common equity will be from retained earnings with an associated cost of 15%. The tax rate for this corporation is 30%.

Reference no: EM13921396

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