What is the wacc for kosm limited

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Problem 1: Kosm Limited has hired you on as a consultant to assist with their capital budgeting. Their target capital structure is 40% debt, 10% preferred stock, and 50% common equity. The interest rate on new debt is 6.25%, the yield on the preferred stock is 7.00%, the cost of retained earnings is 10.75%, and the tax rate is 21%. The company will not be issuing any new stock. What is their WACC?

Group of answer choices

Option 1: 8.58%

Option 2: 6.60%

Option 3: 7.25%

Option 4: 6.44%

Option 5: 8.05%

Reference no: EM132741584

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