Exercise #$2$: The ytm is $9\%,$ the coupon on ABC's debt is $6\%.$ The tax rate is $40\%.$ Preferred stock trades

at $$15$ and pays a dividend of $$2.$ The risk$-$free rate is $6\%,$ the mkt risk premium is $10\%.$ ABC's beta is $0\mathrm{.}8.$

The debt, preferred and common proportions in the capital structure are $0\mathrm{.}303,0\mathrm{.}049$ and $0\mathrm{.}648,$ resp.

WACC $=$

$[5]$

$\%(2$pts$)$