What is WACC for ABC Corp

Reference no: EM132180177

Question - Suppose ABC Corporation has a capital structure consisting of 60% common equity, 10% preferred stock, and 30% debt. Assume tax rate=28%. Assume the expected rate of return for debt is 6%. Also assume the preferred stock price = $25.6, and the preferred dividend = $1. What is WACC for ABC Corp.?

A. 5.4%

B. 5.8%

C. 6.1%

D. 6.5%

Reference no: EM132180177

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