Target weights of debt-preferred and common equity

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A company has target weights of debt, preferred and common equity of 20%, 10% and 70%, respectively. It has liquidation values of debt, preferred and common equity of 30%, 15% and 55%. Its book values of debt, preferred and common equity are 40%, 10% and 50%. The estimated costs, net of adjustments, to the issuer are 4%, 7% and 12% for debt, preferred and common equity. Estimate the firm's weighted average cost of capital.

Reference no: EM132007694

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