Problem related to issuing any new common stock

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Reference no: EM13156019

You were hired as a consultant to the Quigley Company, whose target capital structure is 35% debt, 10% preferred, and 55% common equity. The interest rate on new debt is 6.50%, the yield on the preferred is 6.00%, the cost of common from retained earnings is 11.25%, and the tax rate is 40%. The firm will not be issuing any new common stock. What is Quigley's WACC? show your calculation.

a. 8.15%

b. 8.48%

c. 8.82%

d. 9.17%

e. 9.54%

Reference no: EM13156019

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