Question: The company's target capital structure is 3 0 % debt, 5 % preferred stock, and 6 5 % common stock. It is currently financed with

The company's target capital structure is 30% debt, 5% preferred stock, and

65% common stock. It is currently financed with $300 mil with debt, $50 mil with

preferred stock, and $250 mil with common stock. Its stated tax rate is 25%, with the cost

of debt at 6%, cost of preferred stock of 5.8%, and cost of common stock of 12%.

Calculate its overall cost of capital, WACC.

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