Question: A company's required return on equity is 12%, required return on preferred stock is 4%, and required retum on debt (pretax) is 6%. Given this
A company's required return on equity is 12%, required return on preferred stock is 4%, and required retum on debt (pretax) is 6%. Given this information and the below information, what is the firm's Weighted Average Cost of Capital (WACC)? Stock price Shares common stock Preferred stock $42 3,000,000 $22,000,000 $75,000,000 40% Debt Tax rate O 6.45 percent 22.00 percent 11.10 percent 9.25 percent 8.39 percent
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