Preferred stock and remainder in common equity

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Reference no: EM131309899

You were hired as a consultant to ABC Company, whose target capital structure is 43% in debt, 29% in preferred stock, and remainder in common equity. The before-tax cost of debt is 3.7%, the cost of preferred stock is 8%, and the cost of common equity is 16.5%. What is its WACC if the tax rate is 34%?

Reference no: EM131309899

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