Calculate weights of debt-common equity and preferred equity

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Reference no: EM131597364

Telco Corp. has $350,000 in debt, $700,000 in common equity and $250,000 in preferred stock in its capital structure. The cost of debt is 6.50%, the cost of preferred stock is 6.00%, the cost of common equity is 11.25%, and the tax rate is 40%. What is Telco's WACC?

Hint: You need to first calculate the weights of debt, common equity and preferred equity.

8.26%

9.48%

9.17%

9.54%

7.82%

Reference no: EM131597364

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