Target capital structure-preferred-debt and common equity

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You were hired as a consultant to XYZ Company, whose target capital structure is 29% debt, 11% preferred, and 60% common equity. The interest rate on new debt is 6.80%, the yield on the preferred is 5.75%, the cost of common from retained earnings is 15.00%, and the tax rate is 38.00%. The firm will not be issuing any new common stock. What is XYZ's WACC? EXPLAIN ANSWER AND SHOW ALL WORK

Reference no: EM13941235

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