How calculate the firm wacc

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Question 1: The Longstreet Communications Inc. (LCI) has the following capital structure, which it considers to be optimal: debt = 30%, preferred stock = 20%, and the rest is common stock. LCI's tax rate is 40%. Cost of common stock is 13% and debt could be sold at an interest rate of 9%. LCI issued preferred stock at a price of $111.10 and the issue is expected to pay a constant annual dividend of $10. Calculate the firm's WACC.

Reference no: EM132595319

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