Before-tax component cost of equity-preferred stock and debt

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Reference no: EM131021946

Suppose that TNT, Inc. has a capital structure of 43 percent equity, 23 percent preferred stock, and 34 percent debt. If the before-tax component costs of equity, preferred stock and debt are 15.4 percent, 10 percent and 7 percent, respectively, what is TNT's WACC if the firm faces an average tax rate of 28 percent? Please show all work and formulas.

Reference no: EM131021946

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